Sage 50 Direct Deposit

Setup Sage 50 Direct Deposit- Employee, Company Information, and Payroll

This article has been compiled for users who want to understand all about the Sage 50 direct deposit feature. Before learning any Sage-specific details, the user will first learn about what a direct deposit is and what it signifies.

After that, the user will also learn about the various things that they can achieve in Sage 50 while trying to make the best use of the Direct Deposit feature.

What is Direct Deposit

Before setting up the direct deposit in Sage 50, some users might be wondering what the phrase ‘direct deposit’ actually means. A direct deposit is a payment made directly into a payee’s account. The direct deposit method is seen most of the time in businesses where employers pay all of their employees through this transaction method instead of any other types of deposits that exist.

Advantages of the Direct Deposit

A good thing about direct deposit is that the payments that are made, are made electronically from one account to another rather than one employer handing out checks to all of their employees and the employees then depositing those checks into their accounts. Another purpose that direct deposit serves aside from payments made to payees is that it can also be used for tax refunds.

  • It decreases the time spent processing and reconciling traditional paychecks.
  • It eliminates the requirement for check-cashing services, which are more expensive and time-consuming for the employees.
  • It decreases the amount of time it takes for employees to cash or deposit their checks, even at traditional banks.
  • It allows them flexibility by allowing them to select multiple accounts into which funds should be placed.

Setting Up Direct Deposit with Sage 50

The process of setting up the direct deposit with Sage 50 is a very simple process that does not require much of the user’s time. Following are the steps that the users can follow so that they can set up the direct deposit feature in Sage 50.

  • The first thing the user needs to contact the Sage team to sign up for the direct deposit.
  • Once the user has successfully signed up for the direct deposit, the user will be provided with an authorization code. The user needs to enter the code they have received in Sage 50. To enter the code in Sage 50, the user needs to do the following.
sage 50 authorize direct deposit
  • First, the user needs to go to the ‘System Navigation’ section. 
  • Click on the option titled ‘Edit Company Information.
  • Then need to click on the arrow that is for ‘Direct Deposit.
  • Now, the user will be asked to enter the authorization code that they have. Once the user has entered the code, they can press ‘OK’.
  • The next step that the user needs to complete is that they need to click on the arrow for direct deposit, and then they need to enter their company’s bank details. Furthermore, the user must choose their cash account and a fee expense account that they want their fees and transactions to post to.
  • Now, the user must set up their employee information.
    • To do so, the user must first go to the ‘Employees & Payroll’ tab.
    • select ‘Employees’, followed by selecting ‘View & Edit Employees’.
sage employee direct deposit
  • Now, the user will be able to see a list of all the names of their employees. The user must double-click on the name of the employee from this list. The user also needs to enter their banking information on the ‘Direct Deposit tab.
direct deposit account type

The user is also required to sync their company and employee bank details for approval. Once the user receives their approval, they can begin paying their employees.

Tips to Processing Direct Deposit Payroll Transactions in Sage 50

The process of processing direct deposit payroll transactions is a very simple process that does not require much of the user’s time. Following are the steps that the users can follow so that they can begin processing direct deposit payroll transactions.

  • The first thing needs to proceed to create payroll transactions as they usually would. The user is required to choose the employees whom they want to pay either from the ‘Payroll Entry’ section or the ‘Select Employees’ section.
  • Then they can begin synchronizing the requests that they had previously made for the direct deposits to their company. This can be done in the ‘Direct Deposits Confirmation’ section, which can be found in the WebSync wizard. 
  • After the synchronization has been completed, all of the transactions that were in the pipeline will be sent to the Sage 50 application.
  • Once the transactions have been sent to Sage 50, what will then happen is that Sage 50 will also ensure that the transactions are sent in order. It will send the transactions electronically in the form of a request to the user’s company.

Tips to Set Up a Direct Deposit Employee in Sage 50

The process of setting up a direct deposit employee is a very simple process that does not require much of the user’s time. Following are the steps that the users can follow so that they can begin the process of setting up a direct deposit employee.

  • The first step user must select the option titled ‘Employees/Sales Rep’, which the user can find in the ‘Maintain’ menu.
  • Once the user has navigated into the ‘Employees/Sales Rep’ section from the ‘Maintain; menu, the user needs to provide the employee ID for whom they want to search so that the user can set up the direct deposit for them.
  • Next, the user will be required to select the ‘Direct Deposit tab.
  • In the ‘Direct Deposit’ tab, the user will further be required to set up ‘Account 1’ first.
    • In the ‘Account Type’ field that can be found in parallel to the ‘Account 1’ option, the user will have to click on the drop-down menu to open up a list to choose the proper type.
    • The user’s choices at this juncture will be checking and savings.
  • After making all the appropriate choices, the user will now be required to have their employee’s bank details in hand. The information that is required can be found by the user on the Employee Authorization Document, where the employee was supposed to provide their bank information. They will require these details as they are supposed to enter the relevant information in the ‘Routing/Transit Number’ and the ‘Bank Account Number fields.
  • Next click on the drop-down menu so that they can choose one option among the choices AmountPercent, or Remainder.
  • The user can find the drop-down menu in the Allocation Method field. Here is what the user will have to do based on which option they select from the drop-down menu.
    • If the user picks the Percentage allocation method, then the user is required to enter the percentage of the net pay of the employee that the user wishes to distribute to Account 1. The user will be required to enter this information in the % (Percentage) field. If the user only wishes to distribute to only one account, then the user can simply enter 100%. Sage 50 is capable of keeping a running total in the Total Distributed field which is located at the bottom of the window.
    • If the user picks the Amount allocation method, then the user is required to enter the dollar amount of the net pay of the employee that the user wishes to distribute to Account 1. The user will be required to enter this information in the Fixed Dollar Amount field. Sage 50 is capable of keeping a running total in the Total Distributed field which is located at the bottom of the window.
    • The user is also allowed to set up more accounts as they did with Account 1. To do so, the user will need to do nothing else except re-implement the steps that have been mentioned above for the successful completion of the process.
    • Once the user has completed all of the aforementioned steps, the user can simply press ‘Save’. Pressing on ‘Save’ will cause a message to appear telling the user that a pre-note will be created for approval of direct deposit for this employee. The user can dismiss the message by pressing ‘OK’.

Tips to Enter Company Direct Deposit Information in Sage 50

The process of entering company direct deposit information is a very simple process that does not require much of the user’s time. Following are the steps that the users can follow so that they can begin the process of entering company direct deposit information.

  • In the first step select the option titled ‘Company Information’, which the user can find in the ‘Maintain’ menu.
  • Next, the user will be required to select the ‘Direct Deposit’ tab from the ‘Maintain Company Information‘ section.
  • If the user wishes to make use of the ‘Direct Deposit’ feature, then the user needs to click on the ‘Active’ check box to select it. This needs to be done if the ‘Active’ check box was initially deselected.
  • The user will also be required to choose which company bank account will be debited when direct deposits are made. The user can either select ‘Checking’, or they can select ‘Savings’. After choosing the appropriate account, the user will be required to provide the routing number and the account number of that account.
  • Now the user will have to locate the company cash account that they wish to have debited for each direct deposit transaction and select it once found. The user can do so in the ‘Cash Account’ field, where they can make use of the ‘Lookup’ button to do the same.
  • Also, the user is required to locate and select the company cash account that will be debited for the direct deposit fee as reflected in a general journal entry that Sage 50 will make and select it once found. The user can do so in the ‘Fee Expense Account’ field, where they can make use of the Lookup button to do the same.
  • Once the user has completed all the aforementioned steps, they can press on ‘Save’, and then ‘Close’, and the process will have been completed.

Tips to Setting up Direct Deposit for Company and Employees Sage 50

Below are the steps that outline the process of setting up direct deposit for your company and employees into Sage 50 Cloud Accounts.

  • When your business registers for direct deposit with Sage, Sage issues an authorization code. You then enter the details for your company’s direct deposit account using this code. As soon as you save this data, Sage immediately creates a pre-note, a zero-sum transaction used to confirm the accuracy of the direct deposit account details for your business.
  • An Employee Authorization Agreement must then be completed by each employee who wants direct deposit. The bank account(s) into which the employee’s payroll fund will be deposited are information provided in the Agreement. This account’s details are entered in the Maintain Employees/Sales Reps window. Also, you define how much of the employee’s pay should go to each of the direct deposit accounts. The software automatically creates an employee pre-note when you save account information for an employee.
  • You can synchronize both the company and employee pre-notes by using the Direct Deposit Confirmation window of the wizard. You can send it to Sage by ACH, a special network that connects financial institutions. In turn, Sage sends the company’s pre-note information to your company’s financial institution for approval. For approval, Sage sends the employee pre-note information to your employee’s financial institution. The process of approval takes five banking days in both cases.
  • Use the WebSync wizard to sync the approval status to your Sage 50 desktop application after receiving approval. Download proof of payment for the processing fee for pre-notes at the same time. In Sage 50, this entry appears as a general journal entry.

You are prepared to process direct deposit employees’ paychecks after all company and employee pre-notes have been approved.

Use of the Direct Deposit Center into the Sage 50 Accounts Software

Your company has the choice to transfer payroll funds directly into the authorized bank accounts of the employees all thanks to Sage 50 Direct Deposit. You can get useful links to the tools you will need for the Direct Deposit Service on the Direct Deposit Service Subscription page.

There are the following links:

  • Sync with Sage 50 Web Services: To open the WebSync wizard and synchronize the pre-notes necessary to set up your business for direct deposit, click this link. You can also use the wizard to synchronize direct deposit payroll transactions after your business has received direct deposit approval.
  • Sage 50 Web Transaction Center: Open the Sage 50 Web Transactions there, you can review and handle any fresh Web transactions that the WebSync Wizard discovered during previous data synchronization processes.

Voiding and Reconciling Direct Deposit Paychecks into Sage 50 Software

In only one case direct deposit paychecks should be voided. That one case is when they are rejected by Sage 50 because few problems are encountered at either the institution of your direct deposit employee or your company’s financial institution.

In this case, Sage 50 will inform your company that the direct deposit allocation was rejected and in Sage 50 you should void the paycheck.

Direct Deposit Paychecks Account Reconciliation

Voided direct deposit paychecks, like other direct deposit paychecks, appear in the Account Reconciliation window as part of a single-sum item that includes all payroll transactions for that date. Payroll transactions with voids are cleared in Account Reconciliation the same way you would any other transaction.

If payroll funds are withdrawn before rejection

Payroll transactions may occasionally only be rejected after direct deposit funds have been taken from your company bank. Sage 50 will refund the direct deposit funds to your business if one of the allocations is later refused. Sage 50 will also give you instructions on how to write a general journal entry that credits the appropriate liability account and debits the payroll cash account.

In this situation, you shouldn’t cancel the initial paycheck; instead, you should give the employee whose allocation was refused an accounts payable check. The liability account selected for the General Journal entry will serve as the offsetting account. In this manner, the tax totals that are shown on the paycheck stay accurate. If need any help contact us.

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