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Direct Deposit Software

With direct deposits, money is transferred directly into employees' bank accounts and is immediately available.

For businesses large and small, the use of direct deposits for payroll checks has eliminated the chance of checks being lost or stolen and your employees no longer have to waste lunch breaks to deposit their paychecks at a bank. With direct deposits, money is transferred directly into employees' bank accounts and is immediately available.

For many of us, we take full advantage of direct deposit, without understanding fully how this wonderful time saving tool of the modern age works. Countless payroll software packages and independent processors, offer a Direct Deposit formatting feature. The financial institution that you use can provide you with the required information and software requirements needed for them to enroll your company for direct deposit.

The basic process begins with your employee completing an enrollment form authorizing your business to make Direct Deposit payments into his or her accounts. It is suggested that your company perform a test run by sending the checking or savings account information, with no dollar amount, to your employee's bank via the automated clearinghouse, ACH, Network. The bank will then report back to you if the entry can be posted or if there are changes required in order to access the account information.

The next step is for your company to process the live ACH transactions by sending an ACH file. This is generally accomplished via electronic transmission, CD-ROM, or diskette, to your financial institution. Generally, there is a time limit of at least six banking days between sending the test entry and the first live entry. Please check with your financial institution to verify their required time limit. The ACH file is then processed by your financial institution, removing any transactions
for accounts at its institution, then distributes the remainder through the ACH Network one or two days prior to the Direct Deposit date. On or before the required direct deposit date, your bank will debit your account for the total sum of the Direct Deposit transactions on the ACH file. The financial institutions, which receive the Direct Deposit transactions, will then credit the employee's account
and report the transaction on his or her statement.

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