Example of Banking without the "To Process Banking" Check Box Selected

This is what happens when the "To Process Banking" option is not selected.

This example illustrates the interaction between source bank, recipient, and payee accounts for net pay. February (February 1, 2004 − February 28, 2004) represents the current period, with retro processing going back to January (January 1, 2004 − January 31, 2004).

  • Company ABC uses Source Bank 123. Company DEF uses Source Bank 789.

  • Payee changes from Company ABC to Company DEF, effective February 1.

  • Company ABC changes from Source Bank 123 to Source Bank 456, effective February 15.

  • Earning 1 rate changes from 100 to 150, effective January 1.

  • Deduction 1 rate changes from 20 to 25, effective January 1; no recipient change.

  • Deduction 1 recipient changes from Recipient X to Recipient Y, effective February 1.

  • Deduction 2 recipient changes from Recipient A to Recipient B, effective January 1; no rate change.

  • Payee account distribution changes from Account 1 to Account 2, effective February 1.

Version/ Revision Number January 2004 Company ABC Distribution Information February 2004 Company DEF Distribution Information

V1R1

  

Source Bank 123

  

Source Bank 789
 

Earning 1 = 100

  

Earning 1 = 150

 
 

Deduction 1 = 20

Recipient X

Deduction 1 = 30

Recipient Y
 

Deduction 2 = 15

Recipient A

Deduction 2 = 15

Recipient B
 

Net Pay = 65

Payee Account 1

Net Pay = 105

Payee Account 2
         

V2R1

  

Source Bank 456

    
 

Earning 1 = 150

Difference of 50.00 

    
 

Deduction 1 = 25

Difference of 5 to Recipient X

    
 

Deduction 2 = 15

<15> Recipient A 15 Recipient B

    
 

Net Pay = 110

Difference of 45 to Payee Account 2

    

Explanation of January recalculation (V2R1):

  • Deduction 1

    The difference between V1R1 and V2R1 results in 5.

    The recipient is determined based on where the payee was when the deduction was first calculated (January V1R1). In this case, because there was no change in recipient for Deduction 1, the difference of 5 goes to Recipient X, funded by Source Bank 456.

  • Deduction 2

    No difference exists.

    There's a recipient change retroactive to January. From Recipient A, 15 is reversed and inserted to Recipient B. Each transaction is "charged" to Source Bank 456.

  • Net Pay

    The difference between V1R1 and V2R1 results in 50.

    The payee account distribution is determined based on the pay date of the current calendar (February). The difference, 50, goes to Payee Account 2 and is funded by Source Bank 456.

This example illustrates that net pay and deductions are allocated to Company (payment keys) and recipients are based on pay period, whereas source bank and payee accounts are selected based on when transactions are created.