Direct Deposit
Direct Deposit is a quick and secure way to pay salaries to your employees and tax amounts to the federal, state, and local authorities.
By configuring Direct Deposit in Zoho Spend, you can:
- Streamline your payroll process
- Reduce the risks associated with physical checks
- Ensure timely payments to your employees
Direct Deposit for Organizations
Configuring direct deposit for your organization is an essential step to automate salary and tax payments.
Note: To automate salary payments for your employees, you need to configure direct deposit for your employees as well. Learn more about setting direct deposit for employees.
Once you complete the setup and approve a payroll, your bank account will be debited with the following amounts:
| Debit Amount | Deposited To |
|---|---|
| Net pay of employees whose payment mode is Direct Deposit | The employees’ bank accounts |
| Federal, state, and local tax amounts | The corresponding tax authorities |
| Child support garnishment amounts, if applicable | The corresponding child support agency |
Direct Deposit can be configured for your organization in three simple and straightforward steps:
- Add Bank Information
- Bank Account Verification (handled by Zoho Spend)
- Authorize Payment Service Provider
Add Bank Information
Here’s how you can add your organization’s bank information:
- Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page. - Click Online Payments under Payments.
- Go to the Payroll Payments tab.
- Click Configure Now.
- Enter the Bank Name.
- Enter the Account Number.
- Re-enter the Account Number in the next field.
- Enter the 9-digit Routing Number.
- Choose the Account Type: Checking or Savings.
- Click Add.
Bank Account Verification
After adding your bank account, Zoho Spend will automatically initiate a verification process to ensure the correctness of the provided information.
This automated process typically takes 2 to 3 business days.
- Upon successful verification, you’ll be asked to authorize your payment service provider.
- If the verification fails, you’ll need to update your bank information.
Authorize Payment Service Provider
Prerequisite: Authorization will only be available after completing the following steps:
- Configure pay schedule
- Add employees
- Configure prior payroll, if enabled
Note: The authorization process must be completed by either the business owner or an authorized person who is responsible for signing legal documents on behalf of your organization.
To authorize your payment service provider:
- Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page. - Click Online Payments under Payments.
- Go to the Payroll Payments tab.
- Click Authorize.
- Verify your details for accuracy and click Proceed in the pop-up.
- Review the authorization terms and click Authorize.
Your payment service provider will then be authorized.
The Direct Deposit configuration for your organization has been completed. You can now configure Direct Deposit for your employees and process payrolls.
Note:
- Once a payroll is approved, it takes about 4 business days for payments to be processed. Ensure you approve payroll 4 business days before the pay date.
- Before approving payroll, make sure your organization’s bank account has sufficient funds to cover employee salaries and tax liabilities.
Bank Account Verification
When you add a bank account to Zoho Spend, whether for setting up Direct Deposit for an employee or your organization, it undergoes a verification process.
This process helps Zoho Spend ensure the correctness and accuracy of the provided bank information. This is an automated process that typically takes 2 to 3 business days.
Let’s explore how this process works and how to recover in case of a failure.
How it Works
A $0 ACH payment will be initiated to the provided bank account.
| $0 ACH Payment | Bank Account Verification Status | Result |
|---|---|---|
| Successfully credited to the provided bank account | Success | You can start processing payroll in Zoho Spend. |
| Payment failed | Failure | Bank account will be disabled in Zoho Spend |
Possible Reasons for Failure
The $0 ACH payment may fail if the provided bank account information is incorrect or if there are issues with the bank account.
Effects of Failure
If the bank account fails verification, any attempts to move money in or out of the account through Zoho Spend will be rejected by the bank.
Handling Failures
If the bank account fails verification, you’ll need to replace the bank account with a new one. The new account will then undergo the same verification process.
Other Actions in Direct Deposit
In this section, you’ll learn the other actions related to your Direct Deposit setup.
Download Authorization Forms
Prerequisite: You should have already configured Direct Deposit and authorized your payment service provider.
Here’s how you can download the payment authorization forms:
- Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page. - Click Online Payments under Payments.
- Go to the Payroll Payments tab.
- Click Direct Deposit.
- Click Access Form in the banner below Direct Deposit.
- Click Download next to the authorization form in the pop-up.
The form will be downloaded to your device.
Update Bank Account Details
Here’s how you can update the bank account details:
- Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page. - Click Online Payments under Payments.
- Go to the Payroll Payments tab.
- Click the Edit icon next to Bank Information.
- Make the necessary changes and click Save.
Your bank account details will be updated.
Direct Deposit Processing Speeds
Processing speed refers to the time it takes for Zoho Spend to debit funds from your business bank account and deposit them into your employees’ bank accounts once you approve a payroll. It also determines how close to the pay date you can approve a payroll. That is, up to 3 or 2 business days in advance, depending on your organization’s processing speed.
Types of Processing Speeds
Zoho Spend offers two types of processing speeds:
Note: You need to set up direct deposit for your employees before you can use these processing speeds.
3-Day Processing Speed
All organizations start with the 3-day processing speed by default.
- Approval deadline: At least 3 business days before payday.
- Fund debit date: 1 business day before payday.
- Salary deposit date: On payday.
For example, if payday is Friday, you must approve the payroll by Tuesday. Your business bank account will be debited on Thursday, and employees will receive their salaries on Friday.
2-Day Processing Speed
You may become eligible for 2-day processing speed based on your organization’s payroll history and bank verification. When eligible, your processing speed will be updated automatically.
- Approval deadline: Up to 2 business days before payday.
- Fund debit date: 1 business day before payday.
- Salary deposit date: On payday.
For example, if payday is Friday, you must approve the payroll by Wednesday. Your business bank account will be debited on Thursday, and employees will receive their salaries on Friday.
How Holidays Affect Processing Speeds
Weekends and US federal bank holidays are not considered business days. When a scheduled payday falls on one of these days, it will move to the previous business day. The approval deadline also shifts accordingly.
Examples:
- 3-day processing speed: If payday is a Monday bank holiday, payday shifts to the previous Friday. You must approve the payroll by the preceding Tuesday.
- 2-day processing speed: If payday is a Monday bank holiday, payday shifts to the previous Friday. You must approve the payroll by the preceding Wednesday.
Things to Keep in Mind
- Weekends and US federal bank holidays are not considered business days.
- Always maintain sufficient funds in your bank account (covering both salaries and taxes) before the fund debit date.
- Payment failures due to insufficient funds or incorrect account details may affect your eligibility for faster processing speeds.