Summary

The Clearing House module Direct Deposit process is used to create an export file of Payroll module employee direct deposits. The export file is sent to an ACH processing bank, which processes the ACH transactions, removing the deposit amounts from a bank of your organization and places the funds into the bank accounts of the employees.

Check with your processing bank about the format of the export file and/or obtain a copy of ACH RULES: A complete Guide to Rules & Regulations Governing the ACH Network, published by the National Automated Clearing House Association (NACHA: http://www.nacha.org/).

In order to process a Direct Deposit batch, the direct deposits must first be created in the Payroll module using either the Computer Checks (PR> Computer Checks) or Manual Checks (PR> Manual Checks) process.

Flowchart

The objects in the diagram represent processes in the application. Click on an object in the diagram for more information on that process.

Create the direct deposit transactions

When a Payroll module Computer Checks or Manual Checks batch contains a direct deposit transaction, the CH Batch field on the Commit step is enabled (PR> Computer Checks or Manual Checks> Commit> CH Batch field). The CH Batch field is used to select the Clearing House module Direct Deposits batch where the transactions will be processed. Once the Commit step is complete, the direct deposit transactions in the Payroll module batch will be placed in the selected Direct Deposits batch.

Once the transactions are in the Direct Deposits batch, move through the steps in the process to generate the file for your ACH processing bank and generate the journal entry to record the payment of the ACH transactions.

Pre-note

The Direct Deposit palette also has a feature that allows you to generate a pre-note batch of Payroll employees. A pre-note batch is a batch of zero dollar transactions used to verify that the bank account information of the employees is correct before a batch containing actual transactions is processed.

Manually create a direct deposit

You can also manually create a direct deposit transaction from the Edit step (CH> Direct Deposits> Edit> Create icon).

ACH transactions generated using the Accounts Payable module are processed using the Electronic AP process (CH> Electronic AP).

Step by Step

1     Open the Direct Deposits batch that contains the direct deposit transactions you would like to process.

• If there are no open Clearing House module Direct Deposit batches, you will have to create a new batch and then add the direct deposits to the batch by committing a Payroll module Computer Checks or Manual Checks batch that contains a direct deposit transaction.
• The Batch Month and Batch Year of the Direct Deposits batch are for reference purposes only and do not determine the fiscal period and fiscal year that the journal entry created by the process is posted to.
  • The journal entry date entered on the GL Distribution step (CH> Direct Deposit> GL Distribution> Journal Entry field) determines the fiscal period and year that the journal entry is posted to.

2     View or modify the direct deposits in the batch.

• Select Edit from the Direct Deposit palette. This will open the Edit Direct Deposit window.
• The Edit Direct Deposits window will display all of the direct deposits in the batch.
• Highlight a direct deposit and click the Delete icon to remove employee direct deposits from the batch.
• Highlight a direct deposit and click the Modify icon to modify the information attached to a direct deposit (for example, the bank account number attached to a direct deposit transaction, or the direct deposit amount). This will open the Edit Maintenance window.
• The Edit Maintenance window is generally used to modify the direct deposit bank account number before the export file is created.
  • If the employee bank account information was entered incorrectly on the direct deposit deduction but the Computer Check or Manual Check has already been processed in the Payroll module, you can change the bank account number from this window before the export file is created and the direct deposit is processed.
    • If the bank account number was incorrect, you should also modify the bank account information on the direct deposit deduction on the employee so the bank account number will be correct the next time the direct deposit is created.
    • The bank account number of an employee direct deposit is entered into the Direct Deposit field on the Deductions tab of the Employee Maintenance window (PR> Maintenance> Employee> Deductions tab).
• The Employee Number field displays the employee number of the employee. This field will only be enabled when you are manually creating a new direct deposit.
• The Bank field is the employee bank and is attached to the Payroll deduction that was used to create the direct deposit.
  • In the Payroll module, a deduction has to be setup for each employee bank that will be used in the direct deposit process. A bank is attached to a direct deposit deduction using the Deduction/Benefit Maintenance window (PR> Maintenance> Deduction/Benefit> Open a direct deposit deduction> General tab> Select Bank in the Payee Type field> Select a bank in the Bank field).
• The Amount field displays the amount of the direct deposit transaction.
  • If the Amount field is edited, a warning message will display when a user attempts to save the changes. This message informs users that any changes made to the Amount field will not be reflected in the Direct Deposit GL Distribution, which still uses the values from the committed PR batch.
• The bank account selected in the City’s Account drop-down menu is the bank account that will be used to pay the direct deposit transactions.
  • Bank accounts are created and maintained using the Bank Account Maintenance window (SS> Maintenance> Bank Account).
  • The GL cash account attached to this bank account will be credited by the journal entry created by the Direct Deposits process (SS> Maintenance> Bank Account> Cash Account field).
• The Account Type drop-down menu is used to set up what type of bank account is selected in the Account Number drop-down menu. This will populate based on the bank account type set up on the Employee Maintenance window (PR> Maintenance> Employee> Deductions tab> Select a direct deposit deduction> Account Type field).
• The Child Support Addendum section is used to add child support payment details to the ACH export. Some states require this information in order to track child support payment transactions. These are not required fields.
  • The Amount field is used to record the amount of the child support payment.
  • The Case ID field is used to record the child support case ID number.
  • The FIPS Code field is used to record the Federal Information Processing Standards location code that is associated with the payment.
  • Check the Medical Support toggle if the child support payment includes medical coverage for the beneficiary.
• Press ENTER or click the Save icon when complete to save the changes.

3     Print a proof list.

• The Proof List displays all of the direct deposit transactions in the batch. The Proof List displays the batch that created the direct deposit transactions, employee number, employee name, employee bank routing number, employee account number and dollar amount.
• Select Proof List from the Direct Deposits palette (CH> Direct Deposits> Proof List). This will open the Proof List window.
• Click the Print icon   to process the report immediately or enter a date and time in the field next to the Print icon to schedule the report to generate at a later time. You can view the progress of the report on the Job Viewer window (SS> Utilities> Show Scheduled Jobs).
  • Click the Print icon drop-down menu and select Print Preview to preview the report before printing.
  • Click the Print icon drop-down menu and select Excel to export the report data to an Excel spreadsheet as unformatted data.
  • Click the Print icon drop-down menu and select Excel (Formatted) to export the report data to an Excel spreadsheet that includes much of the Springbrook formatting found on the printed version of the report.
  • Once the report is generated, you can also display the report using the View Reports window (SS> Utilities> View Report).
• Review and archive the Proof List.
• The Source field displays the batch number of the Payroll module Computer Checks or Manual Checks batch that created the direct deposit transaction.
  • The batch number will be followed by a C if the transaction was created by a Computer Checks batch (PR> Computer Checks).
  • The batch number will be followed by an M if the transaction was created by a Manual Checks batch.
• The Transfer/Route and Check Digit fields display the routing number of the direct deposit transaction. This number is pulled from the bank record that is attached to the direct deposit on the Deduction/Benefit Maintenance window (PR> Maintenance> Deduction/Benefit> Open a direct deposit deduction> General tab> Bank field).
  • Routing numbers are set up on bank records using the Bank Maintenance window (SS> Maintenance> Bank).
  • The transfer and routing number should each be four digits long. The check digit should be one digit.
  • The Account Number field displays the bank account number that will receive the direct deposit.

4     Create the export file.

• The file created by this step will be submitted to the bank that processes your ACH transactions.
• Select Export ACH File from the Direct Deposits palette. This will open the Export ACH File Window.
• The toggles on the Export ACH File are used to modify the export file generated by this process. Generally, once you have generated a file that is accepted by your processing bank, you do not want to change any of the information in this window.
• Click the Confirm icon when complete to generate the export file immediately or enter a date and time in the field next to the Confirm icon to schedule the export file to generate at a later time. You can view the progress of the export on the Job Viewer window (SS> Utilities> Show Scheduled Jobs).
• Once the export has finished processing, the Export Settings window will open. This window is used to specify the export path for the file.
  • Check the Open toggle if you would like to open the exported file after it is saved locally.
  • Enter the export path location and click the Save icon   to export the file to the local path.
• Once the export file has been created, send it to your processing bank. The method of transmission is probably covered in the documentation provided by your processing bank.

5     Enter a journal entry date and create a GL Distribution Report.

• The GL Distribution step is used to print the GL Distribution Report, and select which fiscal period and fiscal year the journal entry generated in the process will be posted to.
• Select GL Distribution on the Direct Deposit palette. This will open the GL Distribution window.
• The Journal Entry field is used to enter the journal entry date of the journal entry generated by the process.
  • The Fiscal Period and Fiscal Year fields are not enabled but will populate based on the date entered in the Journal Entry field.
  • You will receive a validation error if the selected fiscal period and fiscal year have been locked using the Lockout Periods feature (GL> Utilities> Lockout Periods).
• Click the Print icon   to process the report immediately or enter a date and time in the field next to the Print icon to schedule the report to generate at a later time. You can view the progress of the report on the Job Viewer window (SS> Utilities> Show Scheduled Jobs).
  • Click the Print icon drop-down menu and select Print Preview to preview the report before printing.
  • Click the Print icon drop-down menu and select Excel to export the report data to an Excel spreadsheet as unformatted data.
  • Click the Print icon drop-down menu and select Excel (Formatted) to export the report data to an Excel spreadsheet that includes much of the Springbrook formatting found on the printed version of the report.
  • Once the report is generated, you can also display the report using the View Reports window (SS> Utilities> View Report).
• The Direct Deposit process will create the following journal entry:

6     Commit the batch.

• Select the Commit from the Direct Deposit palette. This will open an information window.
• Click OK to commit the batch.