This appendix contains the following topics:
There are three ways of handling employee’s payroll using PBS:
| • | Writing a check and providing it to the employee. This is the traditional method which has been included with PBS/RealWorld for many years. |
| • | Positive Pay Processing: You write checks and provide them to the employees. You also notify your bank of the checks that are expected to clear via a positive pay file. This file is generated during a check run. You transmit this file to your bank. If a check is received by your bank that is not in the positive pay file, the bank will not clear the check. |
| • | Direct Deposit Processing: In lieu of writing checks, create a file with a specific format that you send to your bank. Your bank then deposits the pay amounts directly into the employee’s bank accounts. |
Both Positive Pay and Direct Deposit processing can be used at the same time in Payroll. If you are using both, there can be a combination of some employees receiving payments via check and others via Direct Deposit. You may also use one or the other by itself. You may also pay an employee partially by Direct Deposit and partially by check.
There are two methods of direct deposit processing available in PBS: Electronic payment and Report only. This appendix explains the setup of the Electronic payment method only. If you want more information on Report only see the Report only Direct Deposit Method in the Checks chapter.
Some of the features of Direct Deposit (Electronic payment) include:
| • | Set up as many banks as you need |
| • | Assign one or multiple banks and one or multiple banking accounts to each employee |
| • | Pay the employee with a combination of check and direct deposit |
| • | An ACH file and backup ACH file is generated when doing a check (pay) run which you submit to your bank to pay the employees |
The implementation of Positive pay and Direct Deposit processing is documented in this appendix.
These conditions exist if your system is setup for both Positive Pay and Direct Deposit processing:
| • | An employee set up for generating the full net amount to a direct deposit ACH file will not have a positive pay file record generated during the check run. |
| • | If the employee is being paid partially through Direct Deposit and partially by check, the check net amount will be generated in the positive pay file and the ACH record will be generated for the remaining amount. |
| • | If the employee is not set up for Direct Deposit, the full net amount prints on the check and will be generated in the positive pay file. |
Positive pay is notifying your bank via a file of the checks that they will be expected to clear from your bank account.
In Payroll you may design a custom positive pay file. This file can be a comma delimited (CSV) or text file format. This file gets generated during a check run.
All positive pay processing is contained within PBS except the actual transmission of the positive pay file to your bank which you must do manually.
There are bank qualifications and information needed to implement positive pay.
| • | Contact your bank to determine their requirements for positive pay processing. |
Ask them for the file specifications. This will include the fields that are required for the positive pay file.
You must determine the file type that is required. PBS Payroll can produce fixed length (tab-delimited) text or comma separated values (CSV) file types.
You will also need to know the method that they want you to use to submit the positive pay file. It may require that you upload the file via the Internet. This will very likely require a login and password which the bank will provide.
| • | In order to set up your company’s Positive Pay information, you will need the routing number of your bank, your bank account number and Federal Tax ID number. |
Once you have the information needed you may start the implementation process for Payroll positive pay.
You must design a positive pay form based on your bank’s specifications. Please see the Positive Pay File Forms chapter for more information on setting up a form.
A means of testing the file generation is provided. Before you test the form you should first complete steps 2 and 3. During the test you will be asked to enter a bank.
There is one field in the Payroll Control information that pertains to this feature. It is Generate positive pay. Set this to Yes or with a check mark.
If you are not finished with the testing, and you need to do a check run, reset the Payroll Control information to not generate positive pay before the check run.
This step is done under the menu selection Ctl > Banks.
A bank record contains information required for positive pay processing: bank name and your bank information. You must also enter the positive pay format created in step 1. There must be a bank code set up for your bank that has a bank type of Company ACH bank.
Company ACH bank
The company ACH bank is your bank. Enter the fields that pertain to positive pay.
You may use multiple bank accounts. However during a check run you can only use one at a time. The bank used is based on the cash account selected during print checks and post.
For information on entering a bank, see the Banks chapter in the System User documentation.
Now you are ready to do a check run. During the check printing process a positive pay file is generated.
Following check printing, you may now send the positive pay file to your bank.
Positive Pay Data File Security
The main and backup positive pay files contain confidential employee payment amounts. It is recommended that access to the positive pay file directory be restricted only to the person or persons producing and transmitting the positive pay files.
Direct Deposit processing is creating a file of a specific format through Payroll that you send to your bank. This file contains the information necessary for paying your employees electronically. Your bank then deposits the pay amounts directly into the employee’s bank account(s).
You are dealing with two bank types when using Direct Deposit processing. At least one ACH company bank must be entered. This must contain the bank account information where you do your banking. You must also enter the employee ACH banks. Each employee can have their payments sent from one to fifteen bank accounts; each can be the same or different banks.
Each unique bank is set up for Direct Deposit processing in the Ctl menu selection of Banks. The appropriate bank code is entered in the employees in direct deposit fields on the General tab. Additional information is also entered, including the employee's bank account number. Your bank must accept the standard ACH (Automated Clearing House) format. See ACH or Automated Clearing House.
The first time an employee is set up for Direct Deposit processing, an ACH file may be set for the pre-notification status. Pre-notification is used by your bank to verify your employee’s bank account information. There is more information on the pre-notification status later in this appendix.
Once the Direct Deposit processing setup is complete, an ACH-formatted file is generated during a check run. This file contains the employee payment information needed for the processing. The file is then transmitted to your bank where the payments are made electronically to your employees.
There are bank qualifications and other information needed for an Direct Deposit system to work.
| • | Contact your bank to determine their requirements for Direct Deposit processing. Many banks have the capability to process an ACH file. But, your bank may prefer to forward the file to the Federal Reserve System for Direct Deposit processing. PBS can provide the set up for either case. You will need this information when setting up the bank record. |
Let them know that the software has a pre-notification feature that allows you to produce an ACH file that they may use to verify your employee’s bank account information.
Find out the file type they want you to use when generating the ACH file. Do they want Carriage returns and Line feeds (Windows-DOS text file format) at the end of each line or just Line feeds (UNIX/Linux text file format)? If they do not know, send them a test ACH file to verify that they can read it properly. There is a field in the bank record that determines if the Carriage return and Line feeds are created. If you are not sure which is correct, use the operating system default.
You will also need to know the method that they want you to submit the ACH file. It may require that you upload the file via the Internet. This will probably require a login and password which your bank contact will provide.
| • | In order to set up your company’s Direct Deposit information, you will need your bank’s routing number, account number and Federal Tax ID number. |
| • | Determine which employees want to receive their payments via ACH. You may support up to 15 accounts per employee, each from the same or different bank. For each bank account you will need their bank name, ABA routing number and checking or savings account number. |
Once you have the information needed you can start the implementation process for Payroll Direct Deposit processing.
Direct Deposit Processing requires that the first time an employee is set up to deposit a payment into their bank account(s), or any time an employee's bank account number changes, a pre-notification (pre-note) process is initiated.
A pre-note indicator is defaulted for each pre-note employee’s bank account in the ACH file either during the normal check printing cycle or when running the Pre-note ACH file and report program.
A pre-note record has no associated dollar amounts and is sent to the processing bank to verify two sets of information:
| 1. | The employee's bank routing number is correct. |
| 2. | The employee's bank account number is valid. |
In order to implement Direct Deposit processing, certain control records, tables and employee information must be set up.
The set up of Direct Deposit processing requires specific information about the company, processing and receiving banks and the employees. This information includes each bank routing number and the employee's bank account number(s). These numbers are usually found at the bottom of a check or deposit slip.
The following steps are needed to send an ACH file, including employee pre-note records, to your bank:
There are several fields in the Payroll Control information Direct deposit tab that must be set.
The first is the field Method. Set this to Electronic payment. If you have open time worked transactions or adjustments you must complete and post them or delete them before you change the method.
Enter fields Description 1 and Account 1 as well. These are the defaults. In most situations the account number will match the Payroll Default cash account field.
You must also print a special form for Direct Deposit processing. The form you use is also determined in Control information in the Direct mailer form field. Pick a form that suits your needs.
This step is done under the menu selection CTL > Banks.
A bank record contains information required for Direct Deposit processing: bank name and bank ABA routing number. There must be a bank code set up for each bank that will receive a deposit (the receiving bank), plus a unique deduction code for the ACH processing bank. See Processing Bank and Receiving Bank.
There are two types of banks; ACH only (Receiving Bank) and Company ACH (Processing Bank).
ACH Bank
An ACH bank is for employees (and vendors if you are using Direct Deposit processing in Accounts Payable). Multiple employees (and vendors) may bank at the same location. That is why the bank information for Direct Deposit processing is entered in a central location.
Company ACH Bank
The company bank is your processing bank. There must be at least one company bank. Each company bank must have a unique bank account number.
A company bank can also be an ACH bank as one or more of your employees may bank at the same location as your company.
For information on entering a bank, see the System User documentation chapter Banks.
You must enter in Ctl Cash accounts the transaction number for processing ACH records. This is done in field 6. Last PR ACH #. If you enter 1000 in this field, the next transaction number will be 1001.
If you are using Check Reconciliation, this number is used and transferred for ACH pay. No check numbers are used for direct deposit.
Enter account information, on the Electronic payment Direct Deposit fields, in Employees (Enter) for employees participating in Direct Deposit processing. This field is on the General tab.
When you set up each bank account information, for the first time, or change it at any time, it will default to a pre-notification status.
Please see the Pre-note field in the Employees chapter for more information.
You may create an ACH file with the pre-notification ACH records by running the Pre-note ACH file & report found under the Utility menu. You may read about the Pre-note ACH File and Report in the Employees chapter.
Send the ACH file to the processing bank per your banks submission requirements.
For ACH file location information read the File Name, Path and Backup section later in this appendix.
Update Pre-note Status
After the ACH file employee pre-notification bank information has been determined to be satisfactory by the processing bank, you can either update the employee’s bank account status to normal manually through Employees direct deposit fields located on the General tab, or you can run the Pre-note ACH file and report again which has an option to update one or more employees from the Pre-note status to the normal status. Also see the Pre-note ACH File and Report section in the Employees chapter.
Normal Direct Deposit Check Run
With a Direct Deposit normal status the employee's next pay will be included in the generated ACH file during a check run. Send this file to your bank where it will be processed so that payments are sent to your employee’s bank electronically.
Your bank may require the employee go through the pre-notification process each time a change is made to a bank or bank account number. If there are subsequent changes to the employee bank information and you made those changes, the status will again default to pre-notification.
When you must make changes to the employee bank information or if you are adding a new Direct Deposit employee you should go through the following steps.
First do these data entry steps:
a. Review the information received from the employee regarding their bank account(s) and account type(s).
b. Determine if the employee's bank(s) is set up in Ctl > Banks. If not, assign new bank codes.
c. Go into the Employees > Enter direct deposit fields and enter the bank code, bank account number and account type for each account. During the entry the pre-notification status defaults to Y.
Run the Pre-note ACH file & report to create an ACH file with pre-note records.
|
Note |
The following occurs during a check run when you select to print checks and generate an ACH file both on the same run in relation to the pre-notification status pre-notification data on the employee record.
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Send the ACH file to the processing bank per your banks submission requirements.
After you have received the pre-notification confirmation verification from the bank, you must update the status by either method:
| • | In Employees (Enter) update the pre-notification status by changing the pre-notification field to N (unchecked). The employee’s next check will be written to the ACH file. |
| • | If you have multiple employees to update, rather than entering the pre-notification status manually, you may run the Pre-note ACH file & report to automatically update the status to N (unchecked) for multiple employees. |
|
Note |
Employees setup for ACH processing, but who have pre-notification status accounts, will require a printed check. If there are multiple accounts, an exception is one of the accounts, designated as Balance of check, is not in pre-notification. Then no check will be written for the employee even if one of the accounts is pre-notification. |
You may want to print your checks separately from the ACH file generation. This is workable if you are selecting balance of check for all the Direct Deposit employees.
An example is to set up the Employees Payment group field to ACH for ACH file generation and CHK for check printing.
When you print checks and post, use the payment group of CHK when printing checks and ACH for generating an ACH file.
The conventions for saving ACH and positive pay files are similar. In this section of the documentation the ACH file name, path and backup will be explained. In the cases where positive pay is different, it will be noted.
An ACH file can be created during the check printing process or when running the Pre-note ACH file and report utility. An ACH file information about your account and bank also contains employees who have either a normal Direct Deposit account status or are set up for pre-notification. For an explanation of each field for each record in an ACH file, see the Direct Deposit ACH File Specifications appendix in the PBS Administration documentation.
There are two files created during each Direct Deposit run. There is a main file and the backup file.
Primary File
The ACH file name and path are entered on screen 2 Field 12 in the Ctl Banks menu selection (field 11 for Positive pay). The default is PRACH\PRACH00B0001.TXT (Positive pay default is POSPAY\PRPOS00B0001.TXT), however you can enter a path and file name of your choosing. The directory must exist or the path can not be entered.
An existing primary ACH file will be overwritten each time you do a ACH check run or when you run the Pre-note ACH file and report utility.
Backup File
The backup file is written at the same time and to the same directory as the primary ACH file as defined in Ctl Banks. Each backup file has a different name for each check run and serves as a security copy because it is not overwritten during consecutive check runs or when running the Pre-note ACH file and report utility.
The backup file name, represented by PRYYMMDDACCBILBK.ACH, has the following meaning:
|
File Segment |
Description |
|
PR |
Represents the Payroll module |
|
YYMMDD |
Date of run - Year, Month and Day. The month and day will be 1 digit each when 1 to 9. |
|
A |
In order to prevent the backup file from being overwritten if more than one check run is done on the same day, the file name is incremented alphabetically A, B, C, D, etc. However once the file name gets to Z (26 files in one day), it will start over with A again on the 27th check run and delete the previous A file. |
|
CC |
This represents the company number. |
|
BILBK |
The “B” means that the bank number follows. The bank number may be 1 to 4 characters. In the example it is ILBK which is four characters. If your bank number is “A” then it is one character. If the bank number is all numeric like “1”, it writes 0001 to the file. |
|
.ACH |
This is the extension and it indicates that is a file that contains ACH information. |
The backup file contents are the same as the main ACH file. Therefore, if your main ACH file gets overwritten, you can rename the backup to the name your bank expects and submit that file to your bank.
Both the ACH file (path and name) and the backup file path and name are printed on the Direct Deposit Register and on the Pre-note ACH file and report and utility. See the Pre-note ACH File and Report in the Employees chapter.
There is no purge function for the ACH file backups. You may want to delete them manually on a regular basis.
The main and backup ACH files contain confidential employee payment amounts. It is recommended that access to the ACH directory be restricted only to the person or persons producing and transmitting the ACH file.