Direct deposit overview

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Change to CS Support service hours

Our Support department is closed on Friday, April 28th for a company event. However, limited Accounting CS phone support is available on that date from 9 AM - 5 PM ET due to the approaching deadline for quarterly payroll tax forms.

Links to our most popular payroll tax processing topics are available in the Alerts and notices section on the right side of most pages.

Use the application's direct deposit features to create both domestic and international ACH files. There are a number of setup and processing steps required to use direct deposit, and we recommend that you follow them in their listed order.

If you are new to direct deposit, you may find it helpful to review the terms and definitions at the end of this topic.

Special information

International ACH information

Effective September 18, 2009, all international transactions made via the ACH Network are required to use the International ACH Transactions (IAT) SEC code. This rule applies to all ACH participants and simplifies the process of identifying international transactions by requiring that IAT entries include specific data elements defined by the Bank Secrecy Act's (BSA) "Travel Rule."

In all situations it will be assumed that the transactions are originating at a bank located within the territorial jurisdiction of the United States. All IAT transactions are considered outbound items, and the destination country must be a country that accepts US Dollars. Currently the application supports international ACH transactions to Canada, Mexico, and the United States.

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Accounting CS Client Access notes

The following note is important to keep in mind if your firm is processing direct deposit files for a client that is set up to use Accounting CS Client Access.

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Setup

Entering InterceptEFT transmission information (for InterceptEFT users only)

Adding a bank for direct deposit

Adding a direct deposit bank account

Adding direct deposit information for employees

Adding child support information for clients and employees

Adding direct deposit information for vendors or agents

Registering with your state or locality for ACH/EFT payments

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Prenoting

Prenoting direct deposit files

Prenoting child support files

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Processing

Entering and printing payroll/vendor/agent checks

Creating ACH files

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Other

Managing direct deposit files

Running Direct Deposit Processing Reports

Domestic ACH File structure and contents

International ACH file structure and contents

Company entry description for vendor direct deposit transactions

Processing billing impound ACH files using InterceptEFT

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InterceptEFT information

Disclaimer: InterceptEFT is an unaffiliated third party that some of our customers have engaged to provide direct deposit, tax payments, ACH processing, or credit card merchant services.

Accounting CS integrates with InterceptEFT to enable you to send electronic payments of your clients' payroll directly to their employees' checking or savings account and make payments to non-taxed employees and child support payments. For information about establishing service and an account with InterceptEFT please visit their website at intercepteft.com/thomsonreuters. You can also contact InterceptEFT directly at 866.431.9926.

If you are using InterceptEFT to process direct deposit files, there are a few differences in the setup and processing steps. These are noted within the procedures.

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Terms and definitions

ACH
The Automated Clearing House (ACH) network is a nationwide system for interbank transfers of electronic funds. It serves a network of regional Federal Reserve Banks processing the distribution and settlement of electronic credits and debits among financial institutions. ACH payments include direct deposit of payroll; business-to-business payments; and federal, state, and local tax payments, as well as other types of electronic funds transfers.

ACH files
An ACH file is a simple ASCII-format file that adheres to Automated Clearing House specifications. A single ACH file holds multiple electronic transactions — much like a manila file folder that is used to store and transmit dozens of sheets of paper with information related to a single topic. Each transaction within an ACH file carries either a credit or a debit value. Typically, a payroll ACH file contains many credit  transactions to employees’ checking or savings accounts, as well as a balancing debit transaction to the employer’s (that is, your client’s) payroll account. 

Effective date
An “effective date” is attached to each and every ACH transaction. For payroll transactions, the effective date represents the day when debit amounts would actually be withdrawn from the employer’s payroll account and credit amounts would be deposited to an employee’s bank account. An effective date cannot fall on a weekend or on a Federal Reserve holiday. If a transaction were to be sent with an effective date falling on a weekend or bank holiday — or on a date that has already passed (known as a “stale date”) — the transaction would automatically be tagged to settle on the next business day. What that means for your firm as payroll processor is that you need to monitor effective dates carefully because those dates affect when you must transmit your ACH files.

EPS files
EPS (electronic payment system) files are commonly referred to as “transaction files” or “ACH transactions.” They store, for example, employees’ net pay amounts and financial account information. Typically, multiple EPS files make up what is the more well known direct-deposit file, the ACH file. 

InterceptEFT
InterceptEFT (intercepteft.com) is a third-party processing agent that processes funds electronically via the Automated Clearing House. Payroll CS user firms can use InterceptEFT to process payroll direct deposit for their clients.

Disclaimer: InterceptEFT is an unaffiliated third party that some of our customers have engaged to provide direct deposit, tax payments, ACH processing, or credit card merchant services.

NACHA
The National Automated Clearing House Association (NACHA) oversees the ACH network and is primarily responsible for establishing and maintaining operating rules for the network. All financial institutions moving electronic funds through the ACH system are bound by the NACHA Operating Rules, which cover everything from participant relationships and responsibilities to implementation, compliance, and liabilities. The NACHA rules are specific and quite detailed — but with nearly seven billion transactions and a combined dollar value of $20 trillion having moved through the system during the year 2000 alone — it’s clear that adhering to a strict set of rules is crucial to the smooth and successful operation of the ACH system. To learn more about NACHA and the ACH rules, point your Internet browser to nacha.org. 

Originator
An ACH Originator is typically a company that directs a transfer of funds to or from a consumer account.

Originating Depository Financial Institution (ODFI)
The ODFI is the financial institution that deposits ACH files, on behalf of the Originator, into the ACH network. 

Prenote files
Prenote (or prenotification) files are zero-dollar entries sent prior to the first live entry to notify the Receiving Depository Financial Institution (RDFI) of future payments and to test the validity of account information. 

Processing window
This refers to the time period required to initiate and complete the instructions included within an ACH file. The processing window begins when ACH files are submitted to ODFIs and ends when transferred funds are posted to the receivers’ accounts. 

Processing window example

Wednesday Thursday Friday
Processor sends file to InterceptEFT InterceptEFT pulls funds from client’s account and sends to the bank Banks pay employees

Receiver
The Receiver is the person or organization that has authorized the Originator to initiate an ACH entry (for example, a direct deposit transaction) to the Receiver’s account with an RDFI. 

Receiving Depository Financial Institution (RDFI)
The RDFI is the financial institution that receives ACH entries from the ACH Operator and posts the entries to the Receiver’s accounts.

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