Set Up and Generate Payroll Direct Deposits (US)

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1 Set Up and Generate Payroll Direct Deposits (US) Direct deposits in Sage 300 CRE is a process by which you generate a text file to electronically submit to your bank(s) as well as print notifications for the employees. You can set up direct deposits for an employee's entire net pay or for a portion of the net pay so that your bank can deposit it into the employee s bank account(s). Depending on your reporting needs, you can set up separate direct deposit deductions for each banking institution. You can set them up for different account types (savings and checking) within an institution, and for as many as necessary. Considerations Before you use Direct Deposits, consider the following: The direct deposit output text format follows the National Automated Clearing House Association (NACHA) requirements. Check with your bank to ensure that they also follow NACHA standards. It is not always possible for banks to transfer funds to other banks within one day. Check with your bank to determine whether this will affect when you process payroll and the check date you use. To ensure that your employee s pay is deposited on the check date, you may need to process and transmit payroll at least two days before the check date. You may want to set a limit on how many direct deposit bank accounts an employee can have. You will need to set up a separate deduction for each employee direct deposit bank account. Determine whether you want to use direct deposit notifications or stubs only and order the appropriate stock. Create procedures to obtain required bank information from employees. For example, create a form for employees to complete and attach a voided check to. All of the set up steps must be completed for direct deposits to generate properly. Your Bank Account 1. From the Cash Management Setup menu, select Bank accounts and select your payroll bank account. 2. On the Contacts tab, verify your company s Bank Name and Account Number Note: Make sure that your company s bank is also selected on any pay groups that will be paid out of this bank account by going to Payroll and then Setup, Pay Groups Sage Software, Inc. 1

2 Payroll 1. From the Payroll Setup menu, select Taxes, Tax Groups. 2. For the Tax level, select Federal, and enter US in the Tax group. 3. Verify that you have entered the correct Federal ID number in Withholding EIN field. 4. From the Payroll Setup menu, select Deductions and set up at least one direct deposit deduction. Select either Direct Deposit (for partial or split direct deposits) or Net direct deposit (to send all of the employees net pay as a direct deposit) as the deduction type. Set up a separate deduction for each direct deposit that your employees will need. For example, if you have employees who want to deposit a fixed amount to a savings account and the remainder to a checking account, set up two different deductions. First, set up a deduction with a deduction type of Direct deposit for the savings account deposit. Then, set up another deduction with a deduction type of Net direct deposit for the checking account deposit. 5. If your direct deposit notifications will be printing only the stub portion without the face, from the Payroll Tools menu, select Modify Forms, Check Forms and select Stubs only as the check form to use when you generate direct deposits. Employees 1. From the Payroll Setup menu, select Employees. 2. Select an applicable employee and click Deducts. 3. Click List and select the applicable direct deposit deduction for the employee. 4. If the deduction is a partial direct deposit deduction, select the Calc Method and amount to be calculated for this deduction. 5. Select the Auto check box. 6. Click Direct deposit and enter the bank account information for each direct deposit deduction. Note: If your bank requires a prenote, see the next section of this guide Prenotifications. 7. Click OK, Accept Line, Accept Table, Save. 8. Repeat steps 3 through 7 for each additional direct deposit deduction on the employee, if needed. 9. Repeat steps 2 through 7 to set up any additional employees for direct deposit, if needed. Note: You can add only one direct deposit with a deduction type Net direct deposit to an employee record and to an employee check. An employee can have multiple deductions with the type Direct deposit Sage Software, Inc.

3 Prenotifications If necessary, generate a prenotification for your bank for each applicable employee. Prenotifications, or prenotes, are used to test the format of the direct deposit ASCII file, also known as a NACHA file, as well as for testing the bank routing and account numbers for employees before making an actual direct deposit. The direct deposit prenote is set up, generated, and sent to the bank. After your bank approves the direct deposit, you can begin generating actual direct deposits. A prenote file does not actually deposit money into a bank account. Note: You need to have payroll time entries entered and processed in order to generate prenotes. A regular payroll run of printed checks can simultaneously contain prenotes, since no amounts are included on the Prenote NACHA file. To set up prenotes: 1. From the Payroll Setup menu, select Employees. 2. Select an applicable employee and click Deducts. 3. Place the cursor in a grid line containing a direct deposit deduction ID and click Direct deposit. 4. Select Prenote only check box and click OK. Repeat steps 3 and 4 for each direct deposit deduction. 5. Click OK, Accept Line, Accept Table, Save. 6. Repeat steps 2 5 for each employee. To generate prenotes: 1. Enter time and then process checks. Note: The Check Journal should print the direct deposit deduction ID with no amount. If the deduction ID is missing or prints an amount, review your setup. 2. Prior to printing any payroll checks, generate the direct deposit prenotes following the procedure in the Generating Direct Deposits section below. The Direct Deposit Register shows the number of prenotes that were generated. Note: If only prenotes were generated, expect to see the background task bar flashing. If you view the background tasks, a status of No information to print appears. This is normal because there are no direct deposit deduction amounts to generate, there is no information to print on a Direct Deposit Notification. If you encounter problems, refer to the PR Help topic, "Correcting errors when generating direct deposits." 3. Send the NACHA/ASCII file to your bank. a. If your bank approves the prenote, you are ready to generate actual direct deposits. Be sure to clear the Prenote only check box for each direct deposit employee once the bank approves the prenotification(s) before generating actual direct deposits. To do this, go to Setup, 2016 Sage Software, Inc. 3

4 Employees, Deducts, select the direct deposit deduction, click Direct Deposit and clear the Prenote only check box. b. If your bank does not approve the prenotifications, regenerate the direct deposit prenote. If there is a date in the Prenote date field in Setup, Employees, Deducts, Direct Deposit window, use Audit Setup Activity to remove this date before you generate the new prenote NACHA/ASCII file. (See Core Help topic, "Auditing setup activity"). This date field updates when you post your payroll after you generate direct deposit prenotes. Generating Direct Deposits Employees who want a direct deposit set up for a portion of their net pay receive a check and attached stub produced by the Print Checks task. Employees who want a direct deposit set up for their net pay receive a direct deposit notification and stub produced by the Generate Direct Deposits task. Your bank processes automatic deposits to employee bank accounts using the ASCII file that Payroll creates. This ASCII file's format conforms to NACHA rules. Note: Direct deposit setup steps must be completed on employees before time is processed in order for direct deposits to automatically calculate. Direct deposits must also be generated before posting payroll. To generate direct deposits: 1. Enter earnings information using the Enter Time, Enter Checks, or Process Payroll (for auto salaries) tasks. 2. If you entered earnings using the Enter Time or Enter Checks task, select Process Payroll to process those earnings. 3. From the Tasks menu, select Generate Direct Deposits. 4. Enter the direct deposit information: a. Bank account b. Check form (This determines the appearance of the direct deposit notification and stub. Click List to select a different format than what prefills here). c. Effective date d. Direct deposit path (where to save the text file you will be sending to your bank. You can click the List button to browse to the location). Note that 3 files/documents are created when you generate direct deposit: Text file you are sending to the bank Direct deposit notification/stub (you can select to print this to file or to the printer) Direct deposit register (you can select to print this to file or to the printer) 5. Click Options to specify additional direct deposit information required by your bank and click OK Sage Software, Inc.

5 Note: This information will come from the bank in order to comply with their specifications. 6. Click Printer Setup for the direct deposit notifications in the Printer Information area to specify whether you are printing to file or printing to a printer. Note: You are allowed to select a 10-point maximum font size when printing direct deposit notifications. For notifications printed to a text file, always use the default font size of 12 points. 7. Select Direct deposit register from the drop-down list in the Printer Information area, and select print options for the Direct deposit register. 8. Click Start. Notes: If you are printing the notifications and/or register to a file and did not previously specify a name for the print file, you are prompted now for a file name. If you select the same print destination for the notifications and for the register, the notifications print first, followed by the register. If you need to make a correction to a check that has been direct deposited or that includes a partial direct deposit, you must first void the check using the Void Checks task. You cannot delete direct deposited checks using the Enter Checks task. Payroll will not automatically submit the NACHA/ASCII file to the bank. You must complete this step using the steps provided by your bank Sage Software, Inc. 5

6 Generating Direct Deposits - Troubleshooting When generating direct deposits, issues or errors may arise. Here are some common issues and basic resolution steps to help you: Error/Issue Possible Cause Steps to Resolve NOTE: When an error appears in the Background Tasks window, always check Tools, Log Viewer to see if there is more detail in the message column. Asterisks print in any of the boxes on the direct deposit stubs The number of digits that needs to print is greater than the number that fits in the box on the direct deposit stub. 1. In the Generate Direct Deposits Print Selection window, select Printer Setup. 2. Click Change Font and select a smaller font size for printing. 3. Click OK two times. 4. Regenerate the affected stubs using Tasks, Generate Direct Deposits, Regenerate File and clear the Run number field. The Regenerate File check box does not appear when direct deposits need to be regenerated. Direct deposits have already been posted and cannot be regenerated. If direct deposits must be regenerated after posting they must be voided, retained as new, processed and generated again. Direct deposit won t generate for one or more employees. No information to print in Background Tasks Log Viewer says, Bank account number not set up. Employee and/or Bank routing number not set up. Employee Direct deposits do not have a status of printed. The direct deposit deduction ID is missing from the check. Bank account information is missing in the employee setup. Generate direct deposits. If errors appear, see below. Go to Setup, Employees, Deducts and make sure the Auto box is checked for the direct deposit deduction ID. Go to Setup, Employees, Deducts and click on the line of the direct deposit deduction ID. Then click on Direct deposit and fill in the missing information. Generate (or regenerate) as needed Sage Software, Inc.

7 No information to print in Background Tasks Log Viewer says, Check not processed. Employee No information to print in Background Tasks Log Viewer has no additional information. Direct deposits do not have a status of Processed. Direct deposits being generated are partial. Go to Inquiry, Check Information, Check Activity and look at the Check Status column. If the direct deposits have a status other than Processed, they need to be processed in either Enter Checks or Process Payroll. This is normal. Only employees with net direct deposits will receive notifications. If the employees have printed checks, the paystubs with the checks will also serve as the notifications Sage Software, Inc. 7