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Setting Up EFT Options

Employee EFT setup

Setting Up EFT Combine

About Direct Deposit (EFT)

Using Create EFT File

The Create EFT File process allows you to create an Electronic Funds Transfer (EFT) file in one of four different bank formats, pulling payment data from your processed payrolls. Once the file is created, you can then send it to your company bank to transfer funds for Direct Deposit payroll, or International ACH Transfers (IAT), or for your employees’ Child Support payments.

  • You can also use the Create EFT File window to:

    • Generate a test file, without having to Calculate Payroll and run Print/Post Checks. You can check the test file before you generate the actual file for submission.
    • Regenerate a file to replace a past file.
  • Direct deposits are calculated only for banks with a prenote status of Approved. If an employee is set up to be paid by direct deposit, but does not have a bank with a prenote status of Approved (specified on the EFT tab of the Employees window), the employee's paycheck is created as a physical check, not a direct deposit.

You can use the Create EFT File window to create an EFT file to send direct deposit payments to your employees.

  1. Define your company’s EFT defaults in Payroll Setup > EFT Options.
  2. Ensure that bank accounts for your employees have a prenote status of Approved (specified on the EFT tab of the Employees window).
  3. Run Calculate Payroll and Print/Post Checks to print and post your payroll.
  4. When calculating payroll, select the check box option for Create EFT Checks.

To Generate the File

  1. From the Payroll> Tasks> Process Payroll map, choose Create EFT File.

  2. In theEFT Typefield, select Direct Deposit EFT.
  3. In the EFT File Type field, select one of the following:
    • Original. Choose this if generating a file for the first time for a new payroll run. Sage HRMS Payroll automatically assigns a sequential number to the file that it creates. This number, known as the EFT Run Sequence Number, helps you identify the appropriate file when you need to print the Direct Deposit report using the EFT Direct Deposit report.
    • Replacement. Choose this if generating a file to replace a past one. In the EFT Run Sequence field, use the Finder to choose the file you want to replace.
    • Test. Choose this if generating a test file. This file will contain employees who are designated for direct deposit, but their paycheck amounts will be zero. You must run the Calculate Payroll and Print/Post Checks functions prior to generating a Test EFT file.
    • Pre-notification. Choose this if generating a pre-notification (test) file. This file will contain employees who are designated for direct deposit, but their paycheck amounts will be zero.
  4. In the Company EFT Bank field, use the Finder to select the company’s bank ID as it was entered in the Bank field of the EFT Options window and as was used for your payroll.

    Note: You must select the same Bank ID to generate the EFT file as used for posting payroll.

  5. Specify the range of employees to include in this file.
  6. Specify the range of Pay Period End Datesto include in this file. For example, if you specify 09/15/2023 to 10/15/2023, then all direct deposit paychecks with a pay period end date within that range will be included in the file.

    Note: The To Period End Date field is mandatory and must be specified.

  7. In the Effective Entry Date field, specify the date you want the bank to release the funds to your employees' bank accounts (the actual deposit date). You can choose the Use Employee Check Date option, or to use another date, choose Use Default Funds Available Date, and then enter the Default Funds Available Dateof your choice.
  8. In the Local File Path field, enter the location where the file will be created. Do not include the file name, as the file name is defined on the EFT Options window.
  9. In the File Creation Date, enter a date that meets the bank’s requirements. Refer to your company's bank’s specifications.

    The system updates theFile Creation Numbersequentially, and includes it in the file contents. Do not change the File Creation Number unless you are replacing a previously canceled generation and your bank requires that you use the same creation number as before. The system also uses this number for naming the file when it creates the file for history.

    Note: A complete history of all EFT files created is kept by the system, in your database files under \Company\CompanyID\Payroll. The file name is UPDIRECTFile creation #.BankID (italicized items are variables, and UP for U.S. Payroll, CP for Canadian Payroll). For example, for Sample Company Inc. with the bank PRBANK: if a file is generated with the file creation number 0012, the file would be SageHRMS\Company\Payroll\SAMINC\UPDI0012.PRBANK. Keep this in mind as you may want to erase files at some point to save hard disk space.

  10. Complete the File ID Modifier field, if you are generating multiple EFT files on the same date. Only upper case A-Z and numeric 0-9 are permitted in this field. So, if you send more than one file - for example, one for division A and one for division B — then the characters A and B or a similar unique code would be required. Otherwise, the bank sees the second file as a duplicate and will reject the file upon receipt. Some banks will require a specific pre-defined code, so you should confirm the procedure with your bank before you begin creating EFT files.
  11. In the Entry Description field, enter the purpose of the EFT entry to be displayed back to the Receiver. The system will default to REG.SALARY. This description may appear on the employees' bank statements with the deposit line item.
  12. Click Process to start the file generation. The system will inform you of any problems.
  13. When the file is successfully generated, the EFT Direct Deposit reportopens. Print the report now, or you can print it later from Payroll Transaction Reports.
  14. The program then creates a text file with the file name you specified in the EFT Options settings. You can view the file using a text editing program, such as Notepad.
  15. After the file has been generated, you can submit it to the bank following your company's bank's EFT procedures.

You can use the Create EFT File window to create an EFT file to send child support payments to your employees' garnishment recipients.

  • Child Support EFT can only be used for child support payments and not for other types of payroll garnishments.
  • You can use the Create EFT File window to generate a test (pre-notification) file to verify the account information before you submit payments.
  • For Child Support EFT, you cannot regenerate a file to replace the past file once it has been submitted to the bank per State Disbursement Unit (SDU) regulations.

  1. Define your company’s EFT defaults in Payroll Setup > EFT Options.
  2. Define your employees' Child Support deductions in Employee Payroll, on both the employee's Pay tab and the Garnishment tab.
  3. Ensure that bank accounts for your employees' garnishment recipients have a prenote status of Approved (specified on the EFT tab of the Employees window).
  4. Run Calculate Payroll and Print/Post Checks to print and post your payroll.

To Generate the File

  1. From the Payroll> Tasks> Process Payroll map, choose Create EFT File.

  2. In theEFT Typefield, select Child Support EFT.
  3. In the Case State field, select the appropriate state for which you have associated child support orders. Child Support EFT files must be generated one state at a time.
  4. In the EFT File Type field, select one of the following:
    • Original. Choose this if generating a file for the first time for a new payroll. Sage HRMS Payroll automatically assigns a sequential number to the file that it creates. This number, known as the EFT Run Sequence Number, helps you identify the file when you need to print the report using the EFT Direct Deposit report (also used for child support EFT).
    • Pre-notification. Choose this if generating a pre-notification (test) file. This file will contain employees who have been setup with child support garnishments, but their paycheck amounts will be zero. You must set up the SDU account on the employee's Garnishment tab and set the EFT Status to Pre-notification prior to generating a Pre-notification EFT file.
  5. Select the Regenerate Previous Files check box only if you need to recreate a past EFT file and you have not yet submitted the file to your bank.
    • This process is only available for the OriginalEFT File Type (not Pre-notification).
    • To regenerate a file, the affected employees must have the Child Support deduction set to Deposit EFT Status on the Garnishment tab of the employee record at the time of regenerating the file. If the employee's Child Support deduction EFT Status is set to Inactive or Pre-notification at the time of regenerating the file, the payment will be excluded from the file.
    • When using the Regenerate Previous Files option, select the date ranges carefully to include only the relevant paycheck dates. If the Child Support deduction is currently set to Deposit EFT Status on the employee record, but was previously set to Inactive when paychecks were created and posted for an affected employee, regenerating the file will include all payments for employees currently with the EFT status of Deposit and the active deduction during the affected payroll.
  6. In the Company EFT Bank field, use the Finder to select the company’s bank ID as it was entered in the Bank field of the EFT Options window and as was used for your payroll.

    Note: You must select the same Bank ID to generate the EFT file as used for posting payroll.

  7. Specify the range of employees to include in this file.
  8. Specify the range of Check Dates which include Child Support payments to include in this file. For example, if you specify 09/15/2023 to 10/15/2023, then all paychecks with Child Support garnishments issued for check dates within that range will be included in the file.

    Note: The From Check Dateand To Check Date fields are mandatory and must be specified.

  9. In the Effective Entry Date field, specify the date you want the bank to release the funds to the State Disbursement Unit (SDU) accounts (the actual deposit date). Enter the Default Funds Available Datein accordance with the SDU requirements.
  10. In the Local File Path field, enter the location where the file will be created. Do not include the file name, as the file name is defined on the EFT Options window.
  11. In the File Creation Date, enter a date that meets the bank’s requirements. Refer to your company's bank’s specifications.
  12. The system updates theFile Creation Numbersequentially. Do not change the File Creation Number unless you are replacing a previously canceled generation and your bank requires that you use the same creation number as before.

    13. Note: An internal history of all EFT files created is kept by the system in your database files under \Company\CompanyID\Payroll. Keep this in mind as you may want to erase files at some point to save hard disk space. Child Support EFT generates the file name using the Case State ID as the first two characters, plus the file creation date, with the file ID modifier, and the file extension is the company EFT Bank ID. For example, for California Case State file generated on October 1, 2022 for BOFA bank, the file would be CA121001_1.BOFA.

  13. Complete the File ID Modifier field, if you are generating multiple EFT files on the same date. Only upper case A-Z and numeric 0-9 are permitted in this field. So, if you send more than one file -- for example, one for division A and one for division B — then the characters A and B or a similar unique code would be required. Otherwise, the bank sees the second file as a duplicate and will reject the file upon receipt. Some banks will require a specific pre-defined code, so you should confirm the procedure with your bank before you begin creating EFT files.
  14. In the Entry Description field, enter the purpose of the EFT entry to be displayed back to the Receiver. The system will default to Child Supp, but this field can be edited if you need to change the description.
  15. Click Process to start the file generation. The system will inform you of any problems.
  16. When the file is successfully generated, the EFT Direct Deposit reportopens (the report is named EFT Direct Deposit including for Child Support EFT file generation). Print the report now, or you can print it later from Payroll Transaction Reports.
  17. The program then creates a text file with the file name you specified in the EFT Options settings. You can view the file using a text editing program, such as Notepad.
  18. After the file has been generated, you can submit it to the bank following your company's bank's EFT procedures.

When creating a child support EFT, a bank entry should be made in Bank Services. Use a WithdrawalsBank Entry Type to debit the Salary and Wages Payable account for the garnishment amount. Then ensure a G/L Batch for this entry is created to credit the Bank to reconcile the account. If you do not make this entry you will not be able to reconcile the account.

For example, you have a salary of $1,000.00 and a garnishment of $100.00.

When the check is posted, the following entries are made:

  • Debit wage expense is $1,000.00
  • Credit Garnishment is $100.00
  • Credit Wages payable is $900.00
  • Debit Wages payable is $900.00
  • Credit Bank is $900.00

When the child support EFT is generated , create a bank entry to debit Garnishment $100.00 and to credit Bank $100.00.