Payroll Software Direct Deposit: Creating ACH Files Using Payroll Mate Software

Looking for an easy way to reduce costs, streamline the processes to pay your employees, and enhance employee job satisfaction ? Payroll Mate Direct Deposit option is an easy and affordable solution for you to pay your employees and save precious time and money.

What is direct deposit?
Direct Deposit, also known as Electronic Funds Transfer (EFT), is the transfer of funds from the employer’s bank account to the employee’s checking or savings accounts at a participating bank.

What is an ACH file?
ACH (Automated Clearing House) is a special type of computer files that includes instructions for the exchange and settlement of electronic payments passed between financial institutions. In the case of Payroll Direct Deposit, the file includes instructions for the transfer of money from the employer’s bank account to the employees’ bank accounts. ACH is also referred to as NACH or NACHA.

What is a routing number?
A routing transit number is a nine digit bank code, which appears on the bottom of checks identifying the financial institution on which it was drawn. This code is also used by financial institutions to process direct deposits and other automated transfers.

In a nutshell, how does the direct deposit feature work inside Payroll Mate?
Payroll Mate payroll software creates an ACH file (special type of computer file), which the employer sends to the bank. The bank would then use the information inside the ACH file to transfer funds from the company’s bank account to the employees’ bank account.

I own a copy of Payroll Mate software. How do I use Payroll Direct Deposit?

(1) Talk to your bank and make sure they accept payroll direct deposit through ACH files.

(2) Purchase and enable Payroll Mate Option #2 (Direct Deposit).

(3) Inside Payroll Mate: for each employee that you wish to include in the Direct Deposit process, you have to fill the fields in the “Direct Deposit” page of the “New Employee”/”Modify Employee” wizards. This page includes basic information such as Account Type ( “Checking” or “Saving”) , Bank Routing Number and employees Account Number.

(4) Create payroll checks for the employees you want to pay (just like you would usually do using Payroll Mate).

(5) Select the direct deposit tool inside Payroll Mate (from the top menu click on Tools and then click on “Generate Direct Deposit file”). Fill in all the information in the dialog that comes up. Please note that you must contact the bank that is going to process the Direct Deposit file before you go ahead and fill the fields in “Company Banking Information” group. The bank should give you enough information to fill in these fields. The “Company Banking Information” includes the folowing:

Originating Bank Routing Number : This could be the transit routing number of your company’s bank. Payroll Mate accepts only valid routing numbers.

Origin Name : This field could be filled with the company’s name.

Immediate Origin : This field’s value is used to identify your company. Your bank might for example choose to use your IRS Federal Identification Number or even create a unique number for you.

Company Identification : Payroll Mate uses this field’s value to fill in “Company Identification” field in the Direct Deposit file which appears on Field 5 in the “Batch Header Record” and Field 7 in the “Batch Control Record”. Whether this field’s value is the same as that of “Immediate Origin”, or it is set to any different value, is a matter decided by the bank processing the Direct Deposit file.

Company Entry Description : This field’s value is used to describe the purpose of the bank transaction; this description might be printed on the employee’s bank statement. Payroll Mate fills this field with the default value of “PAYROLL” and gives you the option to change it as necessary after consulting your bank.

Destination Bank Routing Number :This value should be provided by your bank. Payroll Mate accepts only valid routing numbers.

Destination Name : This could be the name of your bank.

(6) Click “OK” inside the “Direct Deposit” dialog. If you entered all the required fields properly then Payroll Mate will create the output ACH file.

(7) Send the ACH file generated from Payroll Mate to the bank and ask them to process your payroll direct deposit.