Overview of Setup and Operation
There are several steps necessary for a successful EFT setup. To assist you in the setup, you will need to contact your bank and ask the following questions.
1. What is my Routing and Transit number (DFI)?
2. Do you require carriage returns and line feeds (CR/LF) at the end of each record?
3. Do you require 9 trailer records?
4. What file records do you require?
a. The "File Header" record is the "1" record
b. The "File Control" record is the "9" record
c. The "Company/Batch Header" record is the "5" record
d. The "Company/Batch Control" record is the "8" record
e. The "Entry Detail" record is the "6" record
f. The "Entry Detail Addenda" record is the "7" record
5. Do you require a DEBIT OFFSET record?
6. What is the name and transit/routing number of the ACH operator or receiving point that will process the files.
7. What is the name and transit/routing number of the ACH operator or sending point for the file
In addition, you will need to obtain:
1. The Payroll Bank account number.
2. Your Company ID number.
3. A voided check from each employee wishing to use EFT.
Gathering this information prior to setting up EFT will make the task easier.
EFT is setup for operation by:
1. Defining the parameter to contain a Y in the Elec fund xfer field
2. Use the DEFINE EFT PARAMETERS task to define an EFT parameter for each bank
3. Use the EFT FORM FORMATS task to define EFT forms for each bank.
4. Defining the account and amount information for each employee in the DEFINE EMPLOYEES' EFT task.
The PRODUCE CHECKS/EFT PYMTS task produces EFT forms for the EFT employees and a file for your bank. The LOG PRINTED CHECK NUMBERS/EFT PYMTS task produces a check register and the trace reports. Employees with EFT errors are not included in the EFT file. These employees do not receive an EFT form; instead a physical check is produced for employees with EFT errors.
EFT Selection Value
Each employee active in the EFT program can also have a ten-character EFT selection value for additional selection capabilities. For example, this may be used if EFT is active for two banks and each employee is assigned to a bank. Some employees have UNITED Bank and others NORWEST Bank for an EFT selection value. Employees at UNITED Bank can then be processed as a group. EFT selection values must be defined as edit values for the .EFT SEL employee data item before they can be used.
Employee EFT Definitions
The distribution of the employee's net pay is determined by the definition of "deposits" and "payments" in the DEFINE EMPLOYEES' EFT task. A deposit increases the balance of a savings or checking account (a "credit" in banking terms). A payment normally reduces the balance of a loan account (a "debit" in banking terms). Each employee is unique. For example, employee A may make two deposits: 80% of net to a checking account and 20% to a savings account. Employee B may deposit $1000 to checking, make a $400 payment to her mortgage and deposit the remainder in a Christmas savings fund.
A pre notification creates a file to be sent to the bank with zero dollar transactions. Define pre notification one payroll cycle prior to the payroll cycle that EFT will be activated or changed for an employee if you choose to produce pre notifications with EFT payments. Use the PRE NOTIFICATION OF EMPLOYEES' EFT task to produce pre notifications immediately without producing a regular payroll.
Setting up an Employee for EFT - Pre notification
To set up an employee for EFT payments, follow the two steps below:
To set up an employee for EFT, change the EFT Active field to P - Pre notification. The employee is pre notification for the current pay cycle and will receive a regular printed pay check. In addition, a pre notification record (that contains zero dollars) will be placed in the EFT transactions file for each pre notification employee if you produce pre notifications with the PRODUCE CHECKS/EFT PYMTS task. You can produce pre notifications immediately using the PRE NOTIFICATION OF EMPLOYEES' EFT task.
After the pre notification has been successfully submitted to your bank, change the EFT Active field to a Y - Employee is active before the next payroll cycle is started. The next payroll will produce a "live" EFT transaction and EFT form. No changes are required for the EFT distribution lines.
Changing a Current EFT Employee's Distribution Lines
Follow the below steps to make changes or additions to a current employee's EFT distribution line. An employee is currently EFT active (EFT Active - Y) on the EFT system and wants to make a change to their EFT distribution lines. The following steps are necessary for a change to a checking, savings or payment account for an employee already defined with EFT Active - Y.
Pre notification needs to be defined for the changes to be made to employees one payroll cycle prior to the payroll cycle the change will take affect. Change the Dep or Pay field in the EFT distribution line to the pre notification option needed - E, Q, or T.
Suggestions for Employees' EFT
EFT distribution lines defined with the DEFINE EMPLOYEES' EFT task are processed from the "top down." The first line is processed, then the second, etc. The lines with first priority are entered first; subsequent lines are of lesser priority. If there are not enough funds for the last lines, the message Insufficient funds is reported. Conversely, if there is an overflow of funds, the message EFT distribution not = net pay. Not posted. is reported.
The last line of distribution should always be a Remainder deposit to a savings or checking account. This line will send 100% of the remainder, be it $200 or 1 cent, to a valid account. This line takes care of pennies created by rounding. Note! The exception to this rule is if an employee has 100% of their pay check deposited to a single bank account. You will only need a line 99 specifying a Remainder deposit and the bank account information.
One set of EFT distributions is defined for each employee, but EFT cycles are assigned to each line. An EFT cycle determines if the line is activated. EFT cycles can be a number between one and nine or the letter Y which means "always process." Cycles are user-activated when a Preliminary Check Register is printed and when checks are produced.
Special Considerations for EFT Payments
If you produce special pay checks for extra pay, EFT payments can be assigned to an EFT cycle. This allows you to control when payments are made. This is an issue for extra pay like commissions or bonuses. You do not want the payment to come out of the extra pay. Additionally, payments defined as a percentage should be used with caution. Again, the issue of extra pay would cause the payment to be more than normal. In some cases, this is correct but for other cases it may be incorrect. It is the operator's responsibility to control the EFT deposits and payments.
We recommend numbering the lines 10, 20, 30, etc. Additions or modifications can then be made easily. The last line of every employee's EFT should be a remainder line numbered 99.