Microsoft Dynamics GP Payroll Direct Deposit NACHA compliant?

I don't know about you, but recently I'm getting asked a lot about our payroll direct deposit file and is it NACHA compliant, why yes it is!  NACHA has not changed in a long time so why may your file work for last week's payroll and not this week?

You may not know this, but I grew up with a banking background, back then I loved working in the bank.  Now when I'm on the software side of it and more regulations everyone has to deal with, working with the bank to figure out the issue, it is a little less to be desired.  None the less, someone has to do it.

Typically why a file may get rejected is due to something specific with your bank and the format they want the file in.  Maybe the bank has changed software or guidelines and expecting something different our file is not providing.

Recently the buzz word is about what they call Service Class Code, which has been around for many years, I just do not hear a lot about it.

How we create the file today is NACHA standard, a mixed debit and credit file.  When you open up your ACH file in notepad,

The 2nd line (file header record) will start 5200 (default what we do today) and banks want this to be 5220
The company/batch control record will start with 8200 instead of 8220 in the file.

None of these above fields are in our setup where you can go change, we would need to add an enhancement to the product to allow this.

Now what I'm finding as I work with these banks and what they do not tell you is they will still accept a 5200 file, BUT, you may need to go in and mark the 'Include Auto Settle Line' function in payroll direct deposit setup, ACH fields.  By marking this field it creates a "balanced" file or a debit line in the ACH file at the bottom.  Then the bank will accept this file and meet their standards once again.

So what I learned from all of this is if your bank is stating you need to have this Service Class Code of 5220 file format, ask them if they will accept a file of 5200 with the debit line at the bottom, if they will, all you need to do is change your setup to allow for this.

This clears up a lot of misinterpretation and confusion on everyone's part and of course frustration as employees cannot easily be paid!!

Here is a article we have out there to set up the Include Auto Settle line in the payroll direct deposit windows.

Check out this document of detail on each ACH line/field.  I also included screen shots of my Microsoft Dynamics GP direct deposit setup and my ACH file so you can see where the fields in GP correlate with the ACH file.

Hope you find this useful!

Thanks

Terry Heley, Microsoft
non-banking expert