How do I pay vendors using an electronic funds transfer?
A direct payment is a payment made to the account of the payee. For example, Jane rents a backhoe periodically from Acme Equipment Rental to complete general maintenance. She sets up a direct payment to withdraw funds from the organization's bank account and deposits those funds directly into the bank account for Acme Equipment Rental.
Before you get started
-
You'll need the name of the vendor's bank and the vendor's bank account number.
Setting up direct payment
1. Open Connect Accounts Payable > Vendors > Modify Existing Vendors.
2. Use the Vendor field to enter a vendor name or number. Press Enter.
3. Click to select the Direct Payment tab.
4. Click Add a New Disbursement.
Add a New Disbursement button
5. Enter the Bank.
This is the bank that will receive the direct payment. If you need to add a new bank, use the Bank menu to select Add New.
6. Enter the Account Number.
This is the account number that is assigned to the vendor's bank account.
7. Select the Transaction Type.
The transaction type defines the transaction that will take place. If the vendor send a payment to you, use a Checking/Savings Payment to transfer funds from the vendor's account to your account. If you will make a payment to a vendor, use Checking/Savings Deposit to transfer funds from your account to the vendor's account.
Transaction type
8. Change the status to Prenotification.
There are three stages in the life of a direct payment: Prenotification, Active, and Inactive.
A prenotice, or prenotification, is a test to ensure bank routing information is accurate. During the prenotification phase the direct deposit is not executed and the employee/vendor will receive a regular paycheck.
Direct payment status is prenotification
9. Select the Type.
A type defines the accounting behavior for the disbursement. Use Amount to send a dollar amount to the bank. Use Percent to send a percentage of the total disbursement amount to the bank.
10. Enter the Amount.
If the Type is Amount, enter a dollar amount. If the Type is Percent, enter the percentage to calculate as the disbursement amount.
11. Click Save (CTRL+S).
The vendor's direct payment is set up. The next step is to test the vendor's direct payment set up by sending a test file to the vendor's bank.
Copyright © 2025 Caselle, Incorporated. All rights reserved.
Related Articles
I made changes to a pay code, but the changes don't show up in employees who use the pay code. How do I fix this?
Issue I'm making changes to a pay code in Organization. But the changes that I have made aren't showing up in at the employee level even though the changes to the pay code have been saved. I need the change to be applied to the employee records. How ...Webinar: Direct pay set up and processes (01m04m33s)
Learn how to set up and use direct pay. Direct pay is a payment where money is transferred directly from one party to another. In Accounts Payable, direct pay refers to funds transferred directly to a supplier or vendor to pay outstanding invoices. ...How do I set up vendor for direct pay?
A direct pay vendor is a vendor who is set up to process an electronic direct deposit to transfer funds from the organization's bank account for deposit in the vendor's bank. In the vendor preferences, check if the vendor has an active email address. ...State retirement report - Calculate limit using
It was included because Utah state retirement reporting needs a way to report amounts for public safety when there's a limit (cap) on the reporting amount. The Calculate limit using option will support adding a salary limit (cap). when amount is ...How do I store and share EFT check numbers for all Connect applications using the bank? (2025.02)
Set up a master bank record to share the next available EFT check number with Connect applications that use the master bank record to create EFT check transactions. Storing and sharing EFT (Electronic Funds Transfer) check numbers with other Connect ...