TO SET UP PAYROLL ACH DIRECT DEPOSIT – PAGE 1 of 2
1. Set up deduction code for the School District Payroll Clearing Account
2. Set up one deduction code for each bank represented in the enrollee’s list
and one for the clearing house if the bank will be using a clearing house
to process direct deposits for them.
3. Set up an A/P Master Record for each bank deduction code that you set up
in items #1 and 2.
4. Go to Miscellaneous Payroll Procedures (Payroll Master Menu Item #5)
- Go to Misc Payroll Maintenance Menu (Misc Payroll Procedures Menu Item #1)
- Go to Payroll Tax/Parameter File Maintenance (Menu Item #2)
- Go to Menu Item #4 – Payroll Parameters (1st)
Make the following changes/additions:
Item #9 Print checks by Direct Deposit: If this option is set to “Y” a check will be generated by the system and marked as void. Setting this option to “S” will cause the payroll system to generate a statement rather than a check..
Item #22 ACH Payroll Deduction Number: Enter the number for the School district clearing account established in Item #1 above.
Item #23 ACH Payroll Account: Enter the bank account number for the payroll clearing account.
Item #24 ACH General Debit: Enter “Y” or “N”. Get the answer to this question from your bank.
Item #25 ACH Notified: Enter “N” if this is the first time Direct Deposit is being used in your payroll system. This will be set to “Y” after you send your first test file to your bank for verification of data.
Item #26 ACH Destination Deduction Number: This will be the deduction number for the Federal Reserve if they are going to do the Direct Deposit for your bank. If your bank is going to handle the direct deposit, this deduction number will be the same as Item #5.
Item #27 ACH Add. Header Records: Enter Y if your bank needs additional header records included with the direct deposit file. Enter N if they do not. You will need to check with your bank for the answer to this question.
- For each employee enrolling in the Direct Deposit program you must do maintenance to their
employee record as follows:
- From Payroll Master menu go to Item #1 – Pay Period Payroll Procedures Menu
- From Pay Period Payroll Procedures Menu go to Item #1 – Payroll Preparation Menu
- From Payroll Preparation Menu go to Item #1 – Employee Maintenance Menu
- Select #1 – Employee Maintenance
E. Go to Tax Data Screen (Screen #2)
Item #12 – Direct Bank Account number: Enter the employee bank account number
Item #13 – Direct Deduction number: Enter the Deduction Code set up for this employees’ bank
Item #14 – Direct Savings: Mark this field “Y” if employee deposit is going to a savings account, otherwise leave it as “N”
Item #15 – ACH Notified: This field should be marked N for all new employees enrolling in the Direct Deposit program and for any existing employee who is electing to start using direct deposit. Once the verification file has been generated this field will change to “Y”. If there is a problem with the bank verification and it needs to be re-verified this field must be reset to “N” before re-generating the file.
- Run a compute on your payroll, run a non-mandatory deduction report and create a test diskette
A. From the Payroll Master Menu select #1 – Pay Period Payroll Procedures Menu
B. From the Pay Period Payroll Procedures Menu select #2 – Payroll Preparation Menu
C. From Preparation Menu select #5 – Compute Payroll Checks
D. Run the Non-Mandatory Deductions Report from menu selection #13
E. Return to the Payroll Procedures Menu and select #3 – Payroll Checks Processing Menu
F. Generate the ACH Direct Deposit File by selecting menu item #3, then create the test disk by selecting menu item #4
The disk is to be given to your bank to test the ACH data to be sure it is in the format they require. They will let you know if it is correct or not. If it is correct, you will start providing Direct Deposit with your next payroll. If the disk is not correct you must take the necessary corrective action, go to the change employee section and modify line #15 to “N” for each employee included in your test file. Also you will need to go to the Misc Payroll Maintenance Menu, then to Payroll Tax Parameter Maintenance (Menu Item 2), then to Payroll Parameters – 1st (Menu Item 4). Change ACH Notified (Item 25) to “N”. Then follow step 5, above, to recreate the test data disk.