ACH Payrolls

Related Topics

Portico receives ACH payrolls electronically from the sponsor company on behalf of a member. When an ACH payroll arrives at Portico, the system matches the payroll information to the information in your ACH table. Then the system posts the payroll according to the ACH transaction codes and the member payroll information on the Member Payroll Maintenance dialog box. The system processes ACH payroll items according to the following information:

  • Originating Financial Institution number (OFI)
  • Company ID (COID)
  • Associated payroll number(s)
  • Option specified in the Option field on the Payroll Posting Summary window.

The Member Payroll Maintenance dialog box overrides the ACH transaction code if a Member Payroll Maintenance dialog box exists.

Payroll distribution occurs when members request to have their payroll divided so that funds can be applied to loan payments, share deposits, certificate add-ons, or direct deposits to general ledger accounts for services rendered. Portico can support 39 separate distributions for a member on one payroll.

The system places money in the ACH suspense general ledger when there is too much or too little and when it is not posted or it is over posted. For example, if the system is unable to find a member's account number, Portico places the money in the suspense general ledger. When the account is located, Portico credits the member's account and debits the ACH suspense general ledger to reconcile the exception item.

For smaller payroll groups, Fiserv recommends building ACH trigger transfers using Transfer File. Using Transfer File for ACH distributions, the incoming ACH file is matched against a Member Transfer File Information dialog box using the COID (Company ID), OFI (Originating Financial Institution), and/or Company Name, eliminating the need to associate a payroll number with an ACH table. Using Transfer File for ACH payroll distributions provides several additional benefits:

  • You can use the new ACH Deposit Excess transfer type to instruct Portico to look at the original ACH deposit amount less any distributions for the post date, then transfer the remaining or excess funds of the ACH deposit to the designated account. Note: This process would occur before regular Sweep Processing.
  • For new ACH payrolls, your credit union will no longer need to contact Customer Service to set up an ACH table specific to the payroll.

ACH payroll is automatically posted when the effective date is reached. The effective date for posting transactions is obtained from the effective entry date in the ACH Settlement Notice section of the ACH file. The effective entry date is the date of financial settlement through the Federal Reserve and the date the Originator assigns to each transaction at settlement. If the effective entry date is greater than the calendar date, the ACH items pend until the business date is one day less than the effective date.

The system can post payrolls using one of the following methods:

  • Post ACH items directly to a member's account.
  • Post ACH items to the member's account, then post payroll distributions using post option Post and distribute (B) or post option Deductions only (P) followed by post option Distributions only (D).

Post Option Deductions only (P) (Not Recommended)

Distributions are not made during the same back-office processing cycle as the ACH deposit. You must perform the Payroll Posting Summary window the morning after the back-office processing cycle to post the distributions using post option Distributions only (D). The Control Amount field will be 0.00 and the Share Balance field will be Consider accumulated (A), if the Hold field is Hold distributions (C), Accumulate deductions (A) or Accumulate for loan pymt (L). If the Hold field is No holds allowed (N), the Share Balance field must be Post to minimum (M), Post to negative (N) or Post to zero (Z). Option Consider accumulated (A) will not post the distributions.

Post Option Post and distribute (B) (Recommended) when Share Balance field is Consider accumulated (A)

Distributions are posted automatically during the same back-office processing cycle as the ACH deposit. The system distributes the ACH payroll as specified on the Member Payroll Maintenance dialog box.

If your credit union uses the post code options, complete the following steps to post the ACH payroll:

Steps with Post Option Deductions only (P):

  1. Add the ACH Payroll using the Payroll Posting Summary window.
  2. Complete a Member Payroll Maintenance dialog box for each member who wants distributions on their ACH payroll.
  3. Refer to the 263/178 Reports each day to see if your payroll arrived. The ACH payroll is based on the OFI, company ID, and corresponding ACH Processing Rules window. The 263 Report and the 263/178 Reports are generated.
  4. The day you get the 263/178 Reports, perform the Payroll Posting Summary window to post the payroll distributions using post option Distributions only (D).

When using post option Distributions only (D), the Control Amount field will be 0.00 and the Share Balance field will be Consider accumulated (A), if the Hold field is Hold distributions (C), Accumulate deductions (A) or Accumulate for loan pymt (L). Otherwise, the Share Balance field must be Post to minimum (M), Post to negative (N) or Post to zero (Z).

Steps with Post Option Post and distribute (B) when Share Balance field is Consider accumulated (A):

  1. Add the ACH Payroll using the Payroll Posting Summary window.
  2. Complete a Member Payroll Maintenance dialog box for each member who wants distributions on their ACH payroll.
  3. The system automatically posts and distributes the ACH payroll according to the Member Payroll Maintenance dialog box. The 263 Report and the 263/178 Reports are generated.
  4. The system makes the distributions the same night the ACH arrives.

When using post option Distributions only (D) to post distributions only for an ACH payroll, any incoming ACH items arriving in the back-office cycle for the specific payroll number, in which the Payroll Posting Summary window specifies distribute only, will override the distribute-only setting and the line item distributions will not post.

Let us take an example using post option Post and distribute (B) involving a reject in batch 2.

OFI: 12345678

Company ID: ABCDEFGHIJ

Payroll number: 101

Effective date of ACH file: August 15

Post option: B

The ACH batch total amounts for this example are:

  • Settlement amount: $2000.00
  • Control amounts from three batches:
  • 1: $500.00
  • 2: $600.00
  • 3: $900.00

In the back-office cycle on August 14 (the back-office cycle prior to the effective date), ACH arrives for OFI 12345678. Post option Post and distribute (B) on the Payroll Posting Summary window for the payroll number tells the system to automatically post the associated payroll distributions. When processing begins, the system reads the ACH batches and matches the ACH items to the member identification numbers, such as the Social Security number or the secondary ID, on the credit union's file.

The next morning the online 263 Report shows one member rejected for $250. So, the system performed the following:

  • Credits ACH suspense general ledger specified on the Payroll Posting Summary window for $250
  • Credits the member accounts for $1750
  • Debits the clearing general ledger specified on the Payroll Posting Summary window for the entire $2000

The 263 Report reflects the OFI, company ID, entry description for the associated payroll, and the ACH payroll distributions. The rejected item for $250 plus the posted items equals the OFI settlement amount of $2000. Any rejected distributions do not process and do not go to the suspense general ledger.

Rejected Item + Posted Items = OFI Settlement Amount
$250 + $1750 = $2000

Reviewing ACH Payroll History

The ACH History Inquiry dialog box displays the ACH payroll information for an individual member.

You can access the ACH History Inquiry dialog box from the History - Financial Transaction History tab. The system will display a button in the Type column when one of the following ACH transaction codes appears in the Txn column: AC, ACE, AD, ADE, AN, ANE, AL, ALE, AP, APE, or LX.

The codes AC and ACE indicate straight ACH and the codes AD and ADE indicate ACH payroll.