Overview of Organization Payment Methods

Organization payment methods (OPM) control how you pay payroll payments to your employees and third parties. OPMs interact with payroll definitions, payment sources, payment rules, prenotifications, and link the personal payment methods (PPMs) with your organization payment sources.

After setting up the banks, bank branches, and bank accounts that you use, you can define payment methods for your organization. OPMs include key information, such as payment type, currency, and company bank information.

You must create one organization payment method for each combination of legislative data group, payment type, and currency that you use to disburse wages and other compensation. You can also create rules to determine the distribution of payments from a specific bank account for a specific group of payees. Use the Organization Payment Methods page to view, create and edit.

Note: Create one organization payment method per payment type and currency, such as a direct deposit being paid in USD. Define payment sources and payment method rules to determine which payment source will pay which group of payees. If you decide to create more than one OPM per payment type and currency, you must configure payment method preferences to define OPMs available for employees to use.

Payment Types

When you create an organization payment method, select a payment type.

These are the most common payment types and the name of the corresponding payment processes:

Payment Types	Payment Process
Direct Deposit	Make EFT Payment
Check/cheque	Choose one of these 2 check/cheque payment processes: Use the Generate Check Payments process to run the check process for your employees and third parties in one process. Use the Generate Check Payments for Employees and Third Parties process to run the check process for your employees and third parties in separate processes.
International Transfer	Make EFT Payments
Cash	There's not a cash payment process. You can make cash payments outside of the application and record as an external payment.

Note: The exact list of payment types and their names can vary by country. Your enterprise may support a different range of types that are appropriate for your localization. For example, in the US, the payment type for EFT is Direct Deposit; in the UK it's BACS, and in Australia it's BECS.

Currency

Currency is typically defined as the same currency as your company's source bank account. Define currency in the OPM for payment transfers, such as EFT files.

The prepayment process supports currency conversions but it's important to make sure your localization and bank support multi-currency payments, to include the format of the payment file that supports international payments. For example, your output currency for your elements is defined as USD. All payroll calculations use your element currency, to include net payment amounts. When you define an international transfer OPM with GBP currency and associate it to an employee's personal payment method, the prepayments process converts the payment amount from USD to GBP for the employee. And, the payment process payment file contains the converted amounts in GBP to send the payment in the employee's currency.

Payment Information

Use the payment information region to capture details for your payments. For example, you can specify a maximum limit for each payment made using the organization payment method. You also have an option to define a maximum limit for the total payment transaction.

The exact content of this region can vary based on the selected payment type and your localization.

Note: You can enter payment information at the organization payment method level, the payment source level, or both. Entries at the payment source level take priority over entries at the organization payment method level. If you define details at the payment source level, to use those details when you process payments, you must enter the payment source when you submit the payment process.

Prenotifications

Prenotifications or prenotes are typically 0 amount electronic entries you send to a bank to verify the routing number and account number of the receiving bank. Use the Organization Payment Methods task, to configure following prenotification rules for direct deposit payment types.

Field Name	What it does
Prenotification Required	Designates the prenotification is required for employees.
Prenotification Amount	Designates the prenotification transaction amount. is required for employees. Default value is 0 USD.
Days	Number of days required for a prenotification wait period. Until the waiting period is complete, the employee is paid by check. For example, if you set the prenote wait period to 10 days, depending on the timing for weekly payroll runs, the employee may receive 2 checks before the direct deposit begins.

If you prenote bank accounts in your legacy system, you may choose to skip the prenote process when you implement payroll. To do this use the Payroll Bank Account Prenote Status Update data loader.

Payment Sources

Payment sources identify your company bank accounts debited for payroll payments. You must associate at least one payment source to an organization payment method.

This validation occurs to ensure the bank account on the payment source are available for payroll payments:

• Must be associated to a Payroll Statutory Unit (PSU). You must either assign a PSU legal entity to the bank account or assign a legal employer with a parent PSU to the bank account.

• Must be enabled for payroll payments. You must select Payroll in the Account Use option for the bank account.

• Must have active bank account. You must assign a bank account that's active at the time of the payroll payment.

This diagram highlights the bank account set-up required for Cloud Payroll. Use the payroll extension option on the Features by Country or Territory page to register Cloud Payroll.

Note: In order for a bank account to appear in the payment source page it must be associated to a Payroll Statutory Unit (PSU), enabled for payroll payments and active.

Note: If you use a third-party payroll product, you can create an organization payment method without a payment source record.

Note: If you cost your payments, enter cost account information on the Costing of Payment Sources page.

You can use the same bank account in different payment sources in more than one organization payment method, as in this example.

Organization Payment Method	Payment Source	Bank Account
Check/cheque	Bank of America Account A	Bank A - Account 7890045
EFT	Bank of America Account B	Bank A - Account 7890045

Payment Method Rules

Payment method rules define the appropriate payment source to be used for payment to a specific group of payees. If you define multiple payment sources for an organization payment method, you must set up payment method rules.

You can define standard payment method rules based on the tax reporting unit (TRU) of an employee. You can also use the payment criteria feature to set up payment method rules to derive payment sources within a single TRU, such as rules based on department, job or location.

This example shows payment method rules based on the TRU of the payee. The organization payment method has three different payment sources.

Payment Source	Tax Reporting Unit	Default Payment Source
Payroll EFT Source A Bank A - Account 7890045	None	Yes
Payroll EFT Source B Bank B - Account 1238900	TRU1	No
Payroll EFT Source C Bank C - Account 8765999	TRU2	No

The first payment source that you add is the default payment source, but you can select another payment source as the default, or not have a default payment source.

To understand the effect of a default payment source, consider these examples that describe what happens when a TRU changes, and causes an invalid payment rule.

Approach	Example
With a default payment source, the payment process pays employees with the default payment source.	This approach might suit a company with multiple independent franchises, each with its own TRU. If a franchise holder sells the franchise, payments don't fail.
Without a default payment source, the payments process issues error notifications to ensure that you use the appropriate payment source to fund the payment.	This approach might suit a company with strict policies about payment rule compliance.

International Transfer Payment

The international transfer payment type supports payment methods for electronic funds transfer (EFT) payments to a country different from the originating payment source.

In order for you to use this functionality, you must be able to support payments to international bank accounts. For example, the US supports a file format called IAT NACHA, which supports making payments from the US to bank accounts which reside outside of the US. Attach the file format to the 'International EFT' report category.