Summary

The Pre-Notes process is used to verify that the bank account information entered on the employee records is correct before you process direct deposits. After the bank account information has been entered on the employee records (PR> Maintenance> Employee> Deduction tab), you should process those employees in a pre-note batch. The Pre-note process will create transactions with zero dollar amounts in order to verify that the bank account information is correct.

The transactions will be placed in an ASCII file. The format of that ASCII file will vary depending on your ACH processing bank (this is a relationship you will have to set up with a bank in order to process direct deposits). Your bank will probably send you some documentation on the expected format of that file. You will generally be able to use the toggles on the Export ACH File window (CH> Direct Deposits> Export ACH File) to create that file. Once the file has been generated, send the file to your bank (your bank will determine how they would like to receive the file). The bank will process the file and verify that the bank account information on the employee records is correct.

When creating a pre-note batch in the Direct Deposits process, do not mix pre-note transactions with standard direct deposit transactions in the same batch. When you create a pre-note export file, you must check the Generate with zero amounts toggle. This toggle zeros out all of the direct deposits amounts in the batch and modifies the format of the export file. If there are standard direct deposit transactions in the batch, they will not be processed correctly.

Step by Step

1     Create a new Direct Deposits batch (CR> Direct Deposits).

• Select New from the batch number drop-down menu at the top of the Direct Deposit palette. This will open the New Batch window.
• The batch month and batch year of the batch are used for reference only.

2     Select the employees to include in the pre-note batch.

• Select Generate Pre-Note from the Direct Deposit batch. This will open the Generate Pre-Note window.
• The Create Pre-note window will display all active status employees in the Payroll module that have a direct deposit deduction attached to their employee record. Each direct deposit deduction on the employee record will display as a separate line in the window, so if there is more than one direct deposit deduction attached to the employee, the employee will display more than once in the window.
  • Direct deposit deductions are attached to employee records using the Deductions tab of the Employee Maintenance window (PR> Maintenance> Employee > Deduction tab).
    • A Payroll module deduction is set up as a direct deposit deduction using the Deduction/Benefit Maintenance window (PR> Maintenance> Deduction/Benefit> General tab> Select Bank in the Payee Type drop-down> Select a bank in the Bank field).
• The Bank Account field is used to select the bank account that will be used to pay the direct deposit amounts. Since this is a pre-note batch, the balance of the selected bank will not be affected by this transaction.
  • Only bank accounts that are set up to be used with the Payroll module will display in the drop-down menu (SS> Maintenance> Bank Account> Payroll toggle).
• Select the employees to include in the pre-note batch by checking the Selected toggle. The bank account information on the selected employees will be included on the pre-note batch file, but the selected accounts will not be affected by the pre-note transaction. The pre-note process is just verifying that the bank account information on the selected customer accounts is correct.
  • All employees with a direct deposit deduction attached to their employee record will display in the window, not just employees that have not been run through the pre-note process. Unlike the UB and AR modules, there is no pre-note toggle that will be checked if an employee's bank account information has been pre-noted.
  • Use the Select All icon   to select all employees.
• Press ENTER or click the Save icon when complete.

3     View or modify any of the direct deposits in the batch.

• Select Edit from the Direct Deposit palette. This will open the Edit Selection window.
• The Edit Selection window will display all of the direct deposits in the batch.
• Highlight a pre-note and click the Delete icon to remove it from the batch.
• Highlight a pre-note and click the Modify icon to view the bank account information attached to the pre-note. 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.
• 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 Vendor Number field is not enabled.
• 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 set up 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. Since this is a pre-note batch, the amount on all of the transactions will be zero.
• 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).
• Press ENTER or click the Save icon when complete to save the changes.

4     Print a proof list.

• Select Proof List from the Direct Deposit palette. 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> 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.
• The Proof List will display a zero dollar amount in the Amount column.

5     Create the export file.

• The file created by this step will be submitted to the bank that will process the direct deposits.
• Select Export ACH File from the Direct Deposits palette. This will open the Export ACH File window.
• The format of this file should vary depending on the bank you use to process your direct deposits. When you select a processing bank, they will generally give you a document that outlines the expected format of the ASCII file. Use the information on that document, and possibility the information on the booklet ACH RULES: A complete Guide to Rules & Regulations Governing the ACH Network, published by the National Automated Clearing House Association (NACHA).
  • The fields below in CAPITALS are fields that display in the export file and are referenced in the ACH Rules guide.
• Make sure the Generate with zero amounts toggle is checked when generating a pre-note batch.
• The Tax ID Start Digit field is used to enter a digit before the Immediate Origin field. This will add the value in the field to line 1, position 14 of the export file.
  • The Immediate Origin field will generally display the Federal Tax Identification number set up in SS> Utilities> System Setup> Organization tab> Fed Tax ID field.
  • The Tax ID Start Digit field will be disabled if the Use routing number for immediate origin toggle is checked.
  • If there is a value entered in the Web Direct Information field, the value in the Tax ID Start Digit field will display before the web direct information number.
• The ANSI ID field is used to enter the ANSI ID number, which is also referred to as the ANSI Identification Code Designator (ICD). The ANSI ID Number is placed in front of the Company Identification field on the export file. The value in this field will display on line 2, position 41 of the export file.
  • Leave the ANSI ID Number field blank if an ANSI ID number should not be included on the export file.
  • Standard Identification Code Designators are:
    • 1 - IRS Employer Identification Number (EIN)
    • 3 - Data Universal Numbering Systems (DUNS)
    • 9 - User Assigned Number
  • The appropriate ANSI ID Number for most Springbrook customers is “1”.
  • The selection in this field affects: Record Type 8, position 45.  Record Type 5, position 41.
• The Web Direct Information field is not enabled on this process.
• The Use Tax ID field is used to attach a tax ID to the export file that is different than the one specified on the System Setup window (SS> Utilities> System Setup> Federal Tax ID field). Leave this field blank to use the tax ID specified on the System Setup window.
  • Entering a new tax ID in this field will not change the established system settings. When the Export ACH File step is run in the next batch, the Use Tax ID field will be empty and the tax ID specified on the System Setup window will be the default ID number included in the export.
• Check the Generate with zero amounts toggle if you would like all transaction amounts in the file zeroed out. This option is generally used on pre-note batches to verify the bank account information of customer accounts before processing transactions on those accounts. All direct deposit amounts will be reported as 0, but no changes will be made to the Direct Debits batch. The direct deposit amounts will still display on the proof list and GL distribution report of the Direct Debits process.
  • The TRANSACTION CODE (positions 2-3) of record type 6 will be incremented by 1 if this option is checked.
  • The Default TRANSACTION CODE for Direct Deposits is 22 (Automated Deposit), pre-notification code is 23.
  • If a PPD Offset record is being created (Sweep Account toggle on the Export ACH File window is not checked and the Include Offset toggle is checked), the TRANSACTION CODE of the offset record will also be incremented by 1.
  • The selection of this toggle affects: Record Type 6, positions 2-3; Record Type 6, positions 30-39
• Check the Use Routing Number for Immediate Origin toggle to replace the Federal Tax ID number on the first line of the export file with the route, transfer, and check digit of the Origin Bank.
  • If this toggle is checked, position 14 will have a blank space, and the route, transfer, and check digit will be placed in position 15 through 23.
  • If there is a value in the Web Direct Information field it will be overwritten on the export file by the route, transfer, and check digit.
• Check the Use Immediate Origin For Trace Number toggle to put the Immediate Origin in the Trace number position on the export file. This will disable the Tax ID Start Digit field.
• Check the Use Sweep Account toggle to set the ‘debit’ and ‘credit’ to set to zero.
  • The selection on this toggle affects: Record Type 8, positions 21-32; Record Type 9, positions 32-43
• The One Transaction per account toggle is not enabled in this process.
• Check the Include Offset Record toggle to include an additional line in the file that contains the ‘credit’ sum of the file.
  • If the Use Sweep Account toggle is checked, no offset record will be created (The Include Offset Record toggle will not be enabled if the Use Sweep Account toggle is checked).
  • The selection on this toggle creates one additional Type 6 record after all regular Type 6 transaction records have been created.  Amount field will contain a sum of all Record Type 6 amounts.
• Check the Suppress Carriage Return/Line Feed toggle if you would like to remove carriage returns and line feed characters from the export file. The data will be stored in a single line on the output file if this option is selected.
  • The selection in this toggle will affect all records in the export file.
• The Destination Name field displays the name of the bank that is used to process the ACH transactions.
  • This field will display the bank name of the bank selected in the Immediate Destination Information field. This field will not be enabled. If you would like to change the bank name that displays in this field, change the bank account selected in the Immediate Destination Information field, or change the bank description (SS> Maintenance> Bank> Select a bank> Bank Name field).
  • The selection in this field affects: Record Type 1, positions 42-63
  • The Immediate Destination Code field displays the routing number of the processing bank. The selection in this field will also affect the bank name that displays in the Destination Name field.
  • Click the Immediate Destination Information field label to select the processing bank from a list.
• The processing bank must be set up using the Bank Maintenance window (SS> Maintenance> Bank).
  • The field is displays 10 characters and begins with a blank in the first position, followed by the four-digit Federal Reserve Routing Symbol, the four-digit ABA Institution Identifier, and the Check Digit.
  • The selection in this field affects: Record Type 1, positions 4-13; Record Type 5, positions 80-87; Record Type 6, positions 13-29.
• The Origin Name field will display the bank description of the bank selected in the Immediate Origin Information field. The value in this field will populate on the export file if the Use Routing Number for Immediate Origin or the Use Immediate Origin for Trace Number toggle is checked.
  • The origin is the ACH operator or sending point that is sending the file.
  • The origin will appear on line one, position 64 through 86.
• The Immediate Origin Code field will display the routing number of the sending point of the export file. This field will be included in the export file if the Use Routing Number for Immediate Origin toggle is checked.
  • The 10 digit field begins with a blank in the first position, followed by the four-digit Federal Reserve Routing Symbol, the four-digit ABA Institution Identifier, and the Check Digit.
  • The immediate origin code will display on the first line of the export file in position 14 through 23.
• The Effective Date field is used to enter the effective date of the batch.  This field will default to two days from the current date because banks usually take two days to complete the file transfers.
  • The effect date will display on line 2, positions 70 through 75.
• The Originator Status Code field is “1” for most Springbrook customers.  This code refers to the ODFI initiating entry. Currently assigned Originator Status Codes:
  • ADV file prepared by an ACH Operator: 0
  • Depository financial institution that has agreed to be bound by ACH rules: 1
  • Federal government entity or agency not subject to ACH rules: 2
  • The originator status will display on line 2, position 79.
• The Login field is used to add text to the beginning of the export file.
  • The Login field can be up to 255 characters in length.
• 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.
• The file has been successfully creating and is ready to transmit to your bank.
• Submit the file to your processing bank. The method of submission is probably covered in the documentation provided by your processing bank.
• If the format of the file is incorrect, your processing bank will return the file. Change the toggles on the Export ACH File window until an export file in the correct format is created.

6     Take a screenshot of the Export ACH File window after the pre-note batch file has been accepted by your processing bank.

• The screenshot of the Export ACH File window will provide a record of the toggle settings that create a file acceptable to your bank. If a toggle setting is changed and a direct deposit file is rejected, you can use the screenshot as a reference.
• After the direct deposit file has been accepted by your processing bank, open the Export ACH File window and press CTRL+ALT+PRINTSCREEN.
• Open a document and paste the captured image onto the document. Make sure to save the file in a location that you will remember.

7     Complete the batch.

• You can either delete or commit the batch. Since there are no amounts attached to the ACH transactions in the batch, the GL Distribution report will not generate any line items (it will not affect the general ledger).
  • To delete the batch, highlight the batch in the batch number drop -down menu at the top of the palette and press DELETE.
  • To commit the batch, generate the GL Distribution Report and commit the batch (CH> Direct Deposits> Commit).