Cash Management

Answers to Common Questions about Cash Management Direct Deposit and Debit


General Questions

What is Cash Management?

Cash Management allows you to use internet banking to send or draw funds to or from the accounts of other people or businesses. Common uses are:

   Direct deposit payroll
   Federal and State payroll taxes
   Vendor payments
   401K contributions
   Membership dues
   Invoiced receivables
   Church Tithes

What information do I need?

To process a direct deposit, you need to enter the 9-digit routing number of the financial institution, the account number and whether it is a checking or savings account. You will also need to have recipient or payer sign a short form giving you permission to do the direct deposit or draw. Morton Community Bank can provide you with that form. Tax payments generally are simpler, with a single, pre-loaded routing and account number.

How do I prepare a transaction?

There are two methods of preparing a transaction. You may have a program which can create the information for you, in which case you simply upload the file with a few clicks of your mouse. You can also manually key in the required information for each entry.

When will the money be placed into or drawn from the accounts?

The time the money goes into recipient accounts depends on when each financial institution processes what is known as their "ACH" from the Federal Reserve Bank. That can be as early as shortly after midnight. In most cases, it is generally about 7 am to 8 am. Drawn funds generally are deducted from a payer's account at about the same time. Your account will be debited or credited the total amount of all your credits or debits on the same day it is credited or drawn from the recipients' or payers' accounts.

Is it safe?

Yes. Companies should take the proper precautions to assure the computers used to process credits or debits have up-to-date programs and anti-virus protection. The password to the system needs to be kept secret. Recipients and payers need take no new precautions. In fact, they are now better protected... they no longer run the risk of a lost or stolen paycheck or payment.

How much will it cost?

There is no cost to recipients or payers. There may be a nominal cost to the company initiating the direct deposit or draw. That cost, if any, can be determined by contacting the bank.

How will I learn to do this?

We will come to your place of business and train the person who will process transactions. Generally, companies need our help once or twice. Thereafter, we are available to help as needed. There is no charge for this help.

What happens if we make an error?

If you discover the error before the file processes, then you can simply reopen the transaction in internet banking and correct the error. If the file already has been processed, call the Electronic Banking Department.

How do I get started?

Contact the Electronic Banking Department at Morton Community Bank. We will ask for certain information and then prepare an Application for ACH Origination Privileges for you. That application needs to be approved by our Credit Department. Once that is done, we will prepare an agreement which needs to be signed by officers of the company or organization, such as the president and treasurer.


Specific Questions about Direct Deposit Payroll

What is Direct Deposit Payroll?

Direct deposit is the process of paying your employees by placing money directly into their bank accounts. You no longer produce paper checks. You will need to produce a "Pay Stub" or similar written summary for each employee by direct deposit. The choice is yours.

Why should I use Direct Deposit?

Direct deposit is a benefit to both employees and employers. With direct deposit, employees no longer have to worry about picking up their paychecks. Whether it's a day off or vacation or bad weather or an illness that makes it difficult to pick up their pay check, they will still get paid... directly into their accounts. Employers no longer have to deliver pay checks or deal with lost paychecks. Additionally, employers now can know exactly when their payroll will come out of their account with no more waiting for checks to clear to balance the account.

My employees bank at many different institutions. Does that make a difference?

No, you can process direct deposit to any bank or credit union in the United States.

Do the employees have to have a checking account?

Direct deposit can be made to Checking or Savings.

Can employees split their pay between multiple accounts?

Yes, if your payroll software has the capability. The internet banking system for direct deposit allows multiple deposits.

Can my payrolls be automated?

If you have payrolls which are always the same (same employees and the same amounts, such as a salaried payroll), they can be created one time and then scheduled to repeat on whatever schedule you select. The payroll will process on the assigned schedule unless and until you stop it.

Can I use internet banking to compute my payroll?

No, Internet Banking will send the amount of money you specify to the financial institutions and accounts you specify. It cannot compute payroll or make deductions. Other programs are commonly available to calculate payroll.

Can I pay my federal and state withholding tax through internet banking?

You can pay federal and state withholding tax, which is a separate Cash Management function that we can easily configure.


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