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#306 Payroll Direct Deposit
If Supplement #306, Payroll Direct Deposit has been installed, this option will appear on your Payroll Processing menu.
Function
The Payroll Direct Deposit enables the payroll processing software to prepare data for your bank to automatically deposit net pay and other selected payroll withholdings directly into employee’s bank accounts.
NOTE: Refer to the Help file under Tools/Organization/PR Direct Deposit for instructions regarding printing checks for employees set up to be paid by Direct Deposit.
Things You Should Know
Before You Start - Questions to Ask Your Bank
Procedures and requirements for direct deposit vary depending upon the bank you may be using. GMS software and procedures have been designed to be consistent with most common bank practices.
There are two basic issues that need to be worked out with your bank.
First, you will need to agree upon procedures to transmit direct deposit data to the bank - typically by email attachment or direct upload via bank software.
Second, it is essential that the file generated using GMS direct deposit software corresponds to your bank's direct deposit requirements. To determine this, ask your bank the following questions.
This program will only be operational after all required setup forms and files are completed.
No direct deposit stubs will be printed for anyone with a zero net pay because the bank will reject the direct deposit file if it includes a zero record for live checking or saving. If you notice an employee who is set up on live checking or saving and has a zero net pay for the pay period, you can change their DD Type in the employee file temporarily to "23" for checking pre-note. You can then print a stub for them under Print Checks. Or, if you have Supplement #301 YTD Payroll Detail, you can print out that employee's information for that pay period.
If all employees are set up so that their check is being direct deposited, then you will not need to print payroll checks. After the Create Direct Deposit file has been named and saved, the direct deposit stubs will automatically appear on the screen. After they have been printed and you close the file, the Direct Deposit screen will appear again with a Save Payroll button and a reprint stubs button.
After the direct deposit or payroll checks have been saved, there will be a Reprint Stubs button on the direct deposit form. You may reprint stubs at any time prior to posting the payroll journal entry.
Do not select the Save Payroll button until the following occurs:
After the button has been selected to Save Payroll and you answer Yes to the question “Do you want to save current payroll and update employee files?”, you will NOT be able to reprocess the direct deposit file due to the following:
Operating Instructions
GL Code: The default GL code to be credited for the direct deposits will appear as set up in Tools, Organization, Default GL Codes, Bank Account-Payroll. You can change the bank account at this point by clicking on the combo box arrow and selecting the desired cash bank account.
Number of DD: This field is for informational purposes only. It will display the total number of direct deposits to be made.
Date: This field should contain today’s date. It represents the date the PDEPOSIT file was created.
Bank Account: The Bank Account number will default to the Payroll Bank Acct as set up under Tools, Organization, PR Direct Deposit tab. If the bank account to be used for the current direct deposit is not the default account, you will need to enter the correct bank account number into this field, assuming that the same routing number and security record information applies to the changed bank account.
Bank Settlement Date: This date should represent the date that the direct deposits are to enter the employees’ accounts. It normally would be exactly the same as the payroll check date.
Sort by: This option must be selected before the Create Direct Deposit button is selected. This option allows you to determine in what order you wish your direct deposit stubs to be printed; alphabetically, by department, by site, or by code. Some organizations might choose the department or site option to help organize the stubs for easier distribution.
Include SSN: Check this box if you want the Social Security number to be printed on the stub.
Include Tax Data: Check this box if you want the stubs to include marital status, allowances, and additional amount.
Include Agency Name or Phone Number: Depending on the check format you have selected, should you wish to have the software print the agency name and/or phone number on the direct deposit stub, check the appropriate box.
Include Salary: You can check this box if you want the employee’s rate of pay printed on the stubs.
Create Direct Deposit: Enter the file name that will be used to submit the direct deposit file to the bank and make sure that this file is saved in the proper location. The file name that you enter has to exactly match the bank approved file name. Caution should be used so that you do not have a typographical error or the bank will not accept your file. When creating the file, if the software detects that an employee is missing a bank account, you will be given a message which employee is missing a bank account.
Click on the Save button when finished.
The Direct Deposit Stubs will automatically appear on the screen. After you have selected the printer icon and they have all printed, close the file. You will return to the Direct Deposit screen. At this point you may not change the dates originally selected. If you need to change the date you must close out without saving the file and go back in and re-prepare the file. If you do not have a button for Save Payroll, that means that you will be printing some payroll checks and only need to click on the Exit button. If you do have the button for Save Payroll, see the additional instructions below.
Check Formats: Select the format in which you wish to print the direct deposit stubs. The choices are:
Payroll Direct Deposit Stub Message: You may enter a message up to 130 characters to be printed at the bottom of each direct deposit stub.
Direct Deposit Summary: After you close out from displaying the stubs, the Direct Deposit Summary will display. The total number of direct deposits on the report should equal each direct deposit for each employee. For example, one employee has net pay and two deductions that have amounts direct deposited. That will equal 3 direct deposits. If an employee has net pay that is a pre-note, it will count as one direct deposit.
Reprint Stubs: This button allows you to reprint stubs at any time after saving the checks and prior to posting the payroll journal entry. You may select a different format to reprint stubs if you wish.
Save Payroll: This button will only appear if all employees are set up so that their check is being direct deposited, no payroll checks will be printed.
Do not select to Save Payroll until the following occurs:
After the button has been selected to Save Payroll and you answer Yes to the question “Do you want to save current payroll and update employee files?”, you will NOT be able to reprocess the direct deposit file due to the following:
Function
The Payroll Direct Deposit enables the payroll processing software to prepare data for your bank to automatically deposit net pay and other selected payroll withholdings directly into employee’s bank accounts.
NOTE: Refer to the Help file under Tools/Organization/PR Direct Deposit for instructions regarding printing checks for employees set up to be paid by Direct Deposit.
Things You Should Know
- You should contact your bank for instructions on both communication for file transmission and any special requirements for the ACH (Automated Clearing House) direct deposit file before ordering this supplement. A check list for the bank is included with these instructions.
- Banking procedures generally require a testing period to make certain that all aspects of direct deposit work properly. Your bank will need to approve a live test direct deposit file. This can take anywhere from a week to a month depending upon the bank you are working with.
- GMS direct deposit procedures follow the accepted banking procedure of "pre-noting" employees signing up for direct deposit. This procedure alerts the bank one pay period in advance of an employee actually using direct deposit. When an employee signs up, they are pre-noted during the next payroll. This advises the bank and enables the bank to verify account numbers. During this pre-note period the employee will continue to receive his or her payroll check. The following pay period the employee will automatically switch to an active direct deposit status.
- Direct deposits can be sent to banks generally via the internet. You will need to work with your bank to set up the communications that will allow the file transmittal. Many banks will require a special record at the beginning of your file to clear bank security and allow the deposits to take place. Banks usually provide you with a preset date and time for transmission. You will need to prepare payroll in time to meet the bank deadline.
- The deposits can be to checking or savings accounts. They can also be made to pay cards for your employees that do not have checking or savings accounts.
- Certain employees may select deductions for direct deposit but continue to request their net check amount via normal payroll procedures. These employees will receive their normal payroll check and no direct deposit stub.
- Direct deposit check stubs are designed to be printed either on 8½ x 11 inch plain paper, 11" z-fold self-mailer or 11" window envelope format.
- If an employee had a deduction set up as a direct deposit and then closed the account, in the employee file, change all the direct deposit information to zero and zero out the deduction amount.
- Should you try to create a direct deposit file for the first payroll effective in a new calendar year without having first done the Save/Prepare step in W2 processing, you will be prompted to do so.
Note: When selecting the 11” stub-check-stub format, if you have a split payroll at the end of your fiscal year and salary increases were given to employees as of the beginning of the new fiscal year, the current rate and hours will be reflected under Rate on the top section of the stub and Reg and OT hours at the bottom. The hours and rate of the old fiscal year will be reflected in the Rate2 section.
- If a negative deduction is found but the net pay is positive a message will be displayed including the name of the employee with the negative deduction. This will stop the payroll processing and the correction must be made before proceeding.
- Deductions are sorted by the current dollar amount withheld and will print in this order. If adequate space is not available, deductions not having a current amount will not be printed.
Before You Start - Questions to Ask Your Bank
Procedures and requirements for direct deposit vary depending upon the bank you may be using. GMS software and procedures have been designed to be consistent with most common bank practices.
There are two basic issues that need to be worked out with your bank.
First, you will need to agree upon procedures to transmit direct deposit data to the bank - typically by email attachment or direct upload via bank software.
Second, it is essential that the file generated using GMS direct deposit software corresponds to your bank's direct deposit requirements. To determine this, ask your bank the following questions.
- Do you require any special lead record in the ACH file prepared for payroll?
- The PDEPOSIT file is a balanced entry. Do you require a credit entry only?
- The immediate destination will be set up with your bank routing number and name. Is this a problem?
- The immediate origin will be set up with our federal identification number. Is this a problem?
- Are there any other special requirements for our ACH file?
This program will only be operational after all required setup forms and files are completed.
- The first setup is a form that is found in Tools, Organization, PR Direct Deposit tab. All required/applicable fields must be completed. Follow the detailed instructions as found in the HELP files for Tools, Organization, PR Direct Deposit.
- The second setup form is found in GMS Main, Payroll, Set Up, Deduction. Deduction code 99 with a description that says Net Direct Deposit is already established. If you have other direct deposits that are not for the net pay, such as a savings account, you can use any other code other than 90-95 and 98.
- The third setup is to enter the applicable information, for every employee that has some type of payroll direct deposit, into their Employee File in the Deduction section.
No direct deposit stubs will be printed for anyone with a zero net pay because the bank will reject the direct deposit file if it includes a zero record for live checking or saving. If you notice an employee who is set up on live checking or saving and has a zero net pay for the pay period, you can change their DD Type in the employee file temporarily to "23" for checking pre-note. You can then print a stub for them under Print Checks. Or, if you have Supplement #301 YTD Payroll Detail, you can print out that employee's information for that pay period.
If all employees are set up so that their check is being direct deposited, then you will not need to print payroll checks. After the Create Direct Deposit file has been named and saved, the direct deposit stubs will automatically appear on the screen. After they have been printed and you close the file, the Direct Deposit screen will appear again with a Save Payroll button and a reprint stubs button.
After the direct deposit or payroll checks have been saved, there will be a Reprint Stubs button on the direct deposit form. You may reprint stubs at any time prior to posting the payroll journal entry.
Do not select the Save Payroll button until the following occurs:
- all direct deposit stubs have printed and been reviewed and verified for accuracy
- the direct deposit file has been created for the bank and verified for accuracy
After the button has been selected to Save Payroll and you answer Yes to the question “Do you want to save current payroll and update employee files?”, you will NOT be able to reprocess the direct deposit file due to the following:
- leave balances are posted to Employee Files
- current payroll information is posted to QTD and YTD tables
- current payroll information is posted to the Local, State and Ohio School District tax tables
- a copy of the direct deposit file is saved.
- all employees who are on direct deposit and are pre-noted will automatically be switched to live once that employee has been processed thru payroll
Operating Instructions
GL Code: The default GL code to be credited for the direct deposits will appear as set up in Tools, Organization, Default GL Codes, Bank Account-Payroll. You can change the bank account at this point by clicking on the combo box arrow and selecting the desired cash bank account.
Number of DD: This field is for informational purposes only. It will display the total number of direct deposits to be made.
Date: This field should contain today’s date. It represents the date the PDEPOSIT file was created.
Bank Account: The Bank Account number will default to the Payroll Bank Acct as set up under Tools, Organization, PR Direct Deposit tab. If the bank account to be used for the current direct deposit is not the default account, you will need to enter the correct bank account number into this field, assuming that the same routing number and security record information applies to the changed bank account.
Bank Settlement Date: This date should represent the date that the direct deposits are to enter the employees’ accounts. It normally would be exactly the same as the payroll check date.
Sort by: This option must be selected before the Create Direct Deposit button is selected. This option allows you to determine in what order you wish your direct deposit stubs to be printed; alphabetically, by department, by site, or by code. Some organizations might choose the department or site option to help organize the stubs for easier distribution.
Include SSN: Check this box if you want the Social Security number to be printed on the stub.
Include Tax Data: Check this box if you want the stubs to include marital status, allowances, and additional amount.
Include Agency Name or Phone Number: Depending on the check format you have selected, should you wish to have the software print the agency name and/or phone number on the direct deposit stub, check the appropriate box.
Include Salary: You can check this box if you want the employee’s rate of pay printed on the stubs.
Create Direct Deposit: Enter the file name that will be used to submit the direct deposit file to the bank and make sure that this file is saved in the proper location. The file name that you enter has to exactly match the bank approved file name. Caution should be used so that you do not have a typographical error or the bank will not accept your file. When creating the file, if the software detects that an employee is missing a bank account, you will be given a message which employee is missing a bank account.
Click on the Save button when finished.
The Direct Deposit Stubs will automatically appear on the screen. After you have selected the printer icon and they have all printed, close the file. You will return to the Direct Deposit screen. At this point you may not change the dates originally selected. If you need to change the date you must close out without saving the file and go back in and re-prepare the file. If you do not have a button for Save Payroll, that means that you will be printing some payroll checks and only need to click on the Exit button. If you do have the button for Save Payroll, see the additional instructions below.
Check Formats: Select the format in which you wish to print the direct deposit stubs. The choices are:
- 11" Stub-Check-Stub - if this option is selected you will be able to choose preprinted DD Notification if you have forms with words such as "Payroll Deposit Effective Date" preprinted on the form. If you do not select the preprinted option, the software will print these words on the Direct Deposit stubs. If you select Preprinted DD notifications, you will be given the option to Include Agency Phone.
- 11" z-fold self-mailer
- Window Envelope - this option includes the agency name and address to be printed so that it will appear in the return address window.
Payroll Direct Deposit Stub Message: You may enter a message up to 130 characters to be printed at the bottom of each direct deposit stub.
Direct Deposit Summary: After you close out from displaying the stubs, the Direct Deposit Summary will display. The total number of direct deposits on the report should equal each direct deposit for each employee. For example, one employee has net pay and two deductions that have amounts direct deposited. That will equal 3 direct deposits. If an employee has net pay that is a pre-note, it will count as one direct deposit.
Reprint Stubs: This button allows you to reprint stubs at any time after saving the checks and prior to posting the payroll journal entry. You may select a different format to reprint stubs if you wish.
Save Payroll: This button will only appear if all employees are set up so that their check is being direct deposited, no payroll checks will be printed.
Do not select to Save Payroll until the following occurs:
- all direct deposit stubs have printed, been reviewed and verified for accuracy
- the direct deposit file has been created for the bank and verified for accuracy
After the button has been selected to Save Payroll and you answer Yes to the question “Do you want to save current payroll and update employee files?”, you will NOT be able to reprocess the direct deposit file due to the following:
- all payroll adjustments, if applicable, are cleared from the payroll file
- all expense reimbursements, if applicable, are cleared from the payroll file
- leave balances are posted to Employee Files
- current payroll information is posted to QTD and YTD files in the Employee Files
- a copy of the direct deposit file is saved in the GMS folder called (payroll#) BKUP
