Payroll ACH (Direct Deposit)

Why use ACH Direct Deposit????

Direct deposit saves time and money. For employers who have multiple locations, there are no more overnighting checks or buying massive amounts of check stock. Employees don’t have to worry about finding time to deposit their checks or about getting paid if they are out of town.

Steps for Use:

Step 1: Set up ACH Direct Deposit

Step 2: Set up ACH Bank Accounts

Step 3: Set up Employee Master Direct Deposit

Step 4: Set up Employee Email to send Payroll Check Stubs

Step 5: Run a normal payroll cycle

Step 6: Direct Deposit/Sending the ACH File to the Bank

Step 7: Sending Payroll Check Stubs for Direct Deposit Employees

PLEASE NOTE:

It is advisable to start the ACH setup process two to three weeks ahead of the first payroll cycle to use ACH.  This ensures that pre-notes are accounted for and that a test file can be sent to the bank.

You will want to check with your bank regarding pre-notes requirements. See Pre-Note information under Step 3. Depending on how many employees you have, this process can be lengthy. You may want to start this process before your next payroll cycle.

Also, see

ACH Child Support

Step 1: Set up ACH Direct Deposit

Setup the company information in Payroll> Master File Maintenance > Advanced Options > ACH Direct Deposit.  The bank will supply all the information you need.

NOTES:

• The file created during the cycle is located at GLN32\ccccc\ACHccccc.txt (ccccc represents your company code).  The file is in a sub-directory called \EDI under their company file directory.  ALL ACH files will go into this directory, not just those from the payroll system.  When the ACH file is created, the ACH file that is older than 60 days will be deleted.
• If you are submitting CCD-type transactions, please notify your bank so that they can prepare to receive them.

Step 2: Set up ACH Bank Accounts

All bank accounts (including the company and all employee banks) are set up here.  Employee bank information can be obtained from a voided check.

• Enter up to a ten-digit identifying code for the bank being set up.  This code will be used for ACH transactions only and should not be confused with Sub-Account or Bank codes.
• Enter the bank name
• Enter the routing number for that bank.
  NOTE: Many credit unions will use a different routing/transit number for direct deposit vs. what is encoded on their checks.  It would be a good idea to call the credit union to verify the number.

Step 3: Set up Employee Master Direct Deposit

Setup the Employee information in Payroll > Employee Master > Direct Deposits.  The employee can have unlimited bank accounts.  Enter the employees’ bank, bank account number, account type, and how the deposit will be allocated.

Step 4: Set up Employee Email to send Payroll Check Stubs for Direct Deposit Employees

1. In Payroll> Master File Maintenance > Advanced Options > ACH Direct Deposit tab, check the box for Email Zero Checks.
2. In the Payroll> Employee Master > Name Address tab, enter the employee's email address.

Note: If you are setting up for the first time, you will need to exit Pak Accounting.  The next time you go into Payroll, there will be a new option on the Payroll Cycle Menu called # 9 Email Emp Stubs. You do not have to run a special payroll cycle for email check stubs; just run your normal payroll cycle.  

When you print payroll checks, you can use the View All option to view all the check stubs that will be emailed.

Printing Historical Check Stubs

If you print a historical check stub, the vacation/sick hours for that check stub will be the current vacation/sick hours.  For example, if you are printing a June historical check stub, the vacation/sick hours that print are for September, not June.

Step 5:  Run a normal payroll cycle.

You can print a stub for the employee using the Zero Amt button on the Print Check option.  Or even email the check stub to the employee.

When you print the Payroll Register, an ACH summary page will print, giving an ACH authorization fax sheet with the transmission information.  It also gives you the location of the ACH file so you can send it to the bank.

Step 6: Direct Deposit/Sending the ACH File to the Bank

Tip: When processing Payroll and using the ACH feature, you don’t have to update the cycle before you send the file to the bank.  The ACH file is created when you print your payroll register.  Note: Pak Accounting provides the path of where the file is located for you to upload to the bank.  When ACH is not set up, this will not show on the screen.

Sending the file to the bank BEFORE you update your payroll cycle will help if your bank finds any errors with it.  You will be able to change any bank information and resubmit the file.  Or, if you have accidentally put the wrong check date on your file, it is easy to recreate this file to send to the bank!

BEWARE, though, there is a downside to doing it early before you update!  If you submit the file to the bank and then someone comes along behind you and makes changes to the cycle, you will have a mismatch of data on your hands, i.e., what you sent the bank will not match what was recorded and updated via the payroll cycle!

Step 7: Sending Payroll Check Stubs for Direct Deposit Employees

Use payroll cycle option #9, Email Emp Stubs, to extract the PDF file to send to employees.  A drop-down menu allows you to select which payroll cycle to send the stubs for, and it will default to your most recent cycle. Select your Payroll Cycle, then click on Extract.

After you have extracted the information, the email utility will display on your screen.

Depending on your type of email system, you will need to fill in the Connection information on the Connection tab of the emailer.  This is a one-time setup.  For a non-Outlook/Exchange Server setup, you will be using an SMTP connection (for common email providers such as Gmail or Yahoo).  Either your IT department or your email provider will need to provide you with the login information (such as Host, Port, and User ID).

If you are using an Outlook/Exchange Server, your connection is called MAPI, and the connection screen will look like this: