Understanding Direct Deposit Process

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Paying your employees via direct deposit can help alleviate many headaches for you and your employees.  However, in order to pay your employees via direct deposit a few things have to be understood.

Impact on Pay Calendar

Employers offering direct deposit payments to their employees must process each payroll 2-3 business days in advance of each payday/check date in order to provide sufficient time for the banking system to properly fund the employee's pay into their accounts.  The full payroll costs (net pay + taxes) will be withdrawn from your business account 2-3 days in advance of the payday/check.  As a result of this timeline; if you currently pay your employees just a few days after each pay period ends, you would need to adjust your company's pay calendar in order to benefit from direct deposit payments.

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Direct Deposit Authorization

Each employee interested in being paid via direct deposit must return a signed copy of direct deposit authorization to their employer that contains sufficient language to allow the employer to initiate credit (payments) into and/or debit (reversal) entries from the account holder's account should an error occur.  Reversal entries must be processed within a limited numbers of days from the original credit entries, so please alert your account manager to any discovered errors promptly.  Before a reversal can be processed; you will need to supply a copy of the employee's signed direct deposit authorization so that we can forward to the bank.

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Direct Deposit Credit Application

Employers wishing to offer their employees direct deposit features must first qualify for the service.  To see if you qualify; please complete this Direct Deposit Credit Application.  Please allow up to 10 business days for processing.

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ASAP's Obligations

ASAP does NOT offer direct deposit services to all employers.  We reserve the right to stop the service at any time; including should your payroll be submitted/approved with insufficient time to meet the 2-3 days standards or should you fail to fund your payroll liabilities properly.  ASAP also may request that you fund your direct deposit liabilities outside of the ACH system using an alternative means such as wire transfer or reverse wire authorization.

Please understand these requirements are in place due to regulations we must follow in order to comply with the NACHA guideliness all financial institutions must abide and to remain in good standing with our financial partners.  The NACHA system which direct deposit processing relies upon differs from credit card processing systems in many ways unfortunately.  It may also differ from some types of ACH services a company may be able to establish with their financial institution directly.  It is understandable to have more questions; this area falls into a complicate area of banking that most thankful do not dive into often.  If you have additional questions, please contact your account manager and alert them you wish to be contacted by an ACH specialist to learn more about the ACH procedures.

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