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Setting Up and Running Direct Deposit

First you'll need to —

  • Sign an agreement with your provider (your bank or another third party that sends electronic transactions through the banking channels). Obtain any information you need from the provider, which may include items like a PIN, a Tax ID (EIN), a login ID, and a password.

  • Obtain an agreement and bank information from each employee who wishes to use Direct Deposit.

Summary

One time operation
  1. Install Direct Deposit.
  2. Run Configure/Company Information to configure Direct Deposit for your Payroll Company.
  3. Run Accounts/Bank Accounts to configure the Payroll checking account.
  4. Run Configure/Employees to configure employees who choose Direct Deposit of their paychecks.
Every pay period
  1. Run Calculate Payroll and print paper paychecks for non-Direct Deposit employees, if any.
  2. Run Print/Direct Deposit Paychecks and give non-negotiable "paychecks" to DD employees for their records.
  3. Submit Direct Deposit file to your Direct Deposit provider.

Detailed Procedures

Install and Configure Direct Deposit, usually once

  1. Install Direct Deposit according to the instructions in your Payroll Direct Deposit Guide.

  2. Run Payroll/Configure/Company Information and go to the Direct Deposit section at the bottom of the window to "turn on" Direct Deposit for the company. You many need to lengthen the Company Info window to see the Direct Deposit section in the window.

  3. In the Direct Deposit section at the bottom of the configuration window, select your Direct Deposit provider at "Interface type." This is usually the file format or other identifier required by your provider of Direct Deposit services.

    To turn Direct Deposit processing off for this company, enter "none" for the interface type.

  4. Enter any additional required information, which should be supplied by your provider.

  5. Click OK.

The type "Generic CSV" generates a generic file that can be modified manually for providers who are not directly supported.

You normally need to configure your Payroll for Direct Deposit only once. Go through this procedure again only if you need to change the Direct Deposit file format or turn Direct Deposit on or off for a company.

Enter the Payroll checking account’s bank account number in Accounts/Bank Accounts

  1. Run Accounts/Bank Accounts
    2. to select (or create if you haven't already) the general ledger bank account to which net pay expense should be credited.

  2. Enter a Name and Account ID for identifying the General Ledger bank account you'll use for Payroll.

  3. At "Bank account number," enter the account number that identifies your payroll checking account at the bank. The presence of Direct Deposit makes this a required field when you select this account for paycheck expense.

  4. Select the G/L Payroll bank account, provide the remaining information, and save the entry.

Configure employees for Direct Deposit

  1. Run Payroll/Configure/Employees and go to the Personnel tab to "turn on" Direct Deposit for individual employees.

  2. Click or press Enter to check the "Direct deposit paychecks" checkbox on the Personnel tab if the employee has elected Direct Deposit of paychecks.

    To turn Direct Deposit off for the employee, uncheck the "Direct deposit paychecks" checkbox. The system remembers the employee's DD configuration in case you turn the employee's DD back on in the future.

  3. Supply the employee’s bank information — bank ABA (routing) number, bank account number and type, and distribution for depositing pay. The deposit can be distributed to up to five bank accounts.

  4. Click OK and save the changes.

Submit a NACHA Prenote File for Direct Deposit (NACHA interface users only)

If you’re using the NACHA interface, from the Payroll menu you generate a special file called a "Prenote" file to test the company’s Direct Deposit setup.
  1. Run Payroll/Electronic Filing/Nacha Prenote File for Direct Deposit.

  2. Verify the Payroll bank account ID, bank account number, and the effective date. Click OK.

  3. The displayed employee list should include the employees who are new to Direct Deposit and those whose Direct Deposit configuration has changed since the last time you submitted a Prenote file. Make sure that the new and changed Direct Deposit employees are checked. Click OK.

    Payroll creates the Prenote file and stores it in the export folder in the company data folder.

  4. Follow whatever instructions you received for sending the Prenote file to your provider.

Calculate Payroll and print paychecks (if any)

  1. Run Calculate Payroll as you usually do. The Payroll run calculates pay for both Direct Deposit employees (if any) and employees (if any) who want a printed paycheck.

  2. Print and post printed paychecks for non-Direct Deposit employees (if any) in the pay run.

    Sometimes a Direct Deposit employee may prefer to have a bonus or expense reimbursement or other occasional payment as a printed check. You can print paychecks for Direct Deposit employees in this pay run by clicking the checkbox "Real checks for Direct Deposit employees."

    Remember, to turn Direct Deposit off completely for an employee, uncheck the Direct Deposit checkbox in the employee configuration window.

Print Direct Deposit Paychecks

  1. Then you run Print/Direct Deposit Paychecks in order to –

    1. Print a non-negotiable check and stub for distribution to each Direct Deposit employee.

      2. and

    2. Automatically post the pay run for Direct Deposit employees

      and

    3. Automatically create a file that contains each Direct Deposit employee’s paycheck and bank account information.

    When Direct Deposit Paychecks finishes printing, a message is displayed that tells you the path and the name of the Direct Deposit file.

Submit the Direct Deposit file to your provider

  1. Submit the Direct Deposit file to your provider or agent, following the instructions you've received.

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