Organization Payment Methods

After setting up the banks, bank branches, and bank accounts, you define the payment methods your organizations use. Organization payment methods (OPMs) link the personal payment methods (PPMs) with the payment sources.

This means you don't need to store as many details about the payment method on the person record.

OPMs can interact with several components.

• How payroll definitions use them

• What payment types work with them

• Payment sources

• Payment rules

• Organization Payment Methods task

Payroll Definitions

Part of creating a payroll definition is selecting what OPMs work with it. The employees you associate with this payroll definition use the OPMs you select.

You can override the payment method at the employee level.

For further info, see Payroll Definitions for the US in the Help Center.

Payment Types

When you create an OPM, you select a payment type. For further info, see Organization Payment Methods Task below.

The most common payment types are:

• Electronic funds transfer (EFT)

• Check

• International transfer

Tip: If you select the EFT payment type, you can enter EFT info at the payment method level, the payment source level, or both. Entries at the payment source level take priority over entries at the organization payment level. For example, if you define details at the payment source level, then to use those details when processing payments, you must enter the payment source when submitting the payment process.

Payment Sources

If you're using Oracle Fusion Global Payroll for payroll processing, you must define at least one payment source for each OPM.

Note: Use Oracle Fusion Cash Management to associate each payment source with an active bank account.

If you define additional details at the payment source level, then to use those details when processing payments, you must enter the payment source name when submitting the payment process.

This table illustrates how you can use the same bank account in different payment sources in more than one OPM.

Payment method	Payment source	Bank account
Check	Bank of America Account A	Bank A - Account 7890045
EFT	Bank of America Account B	Bank A - Account 7890045

Note: If you're costing your payments, enter cost account info through the Costing of Payment Sources task.

Payment Rules and Default Payment Sources

If you define multiple payment sources, you can use payment rules to determine the appropriate payment source based on tax reporting unit (TRU).

The following example shows one OPM with three different payment sources for different TRUs.

Payment source	Tax reporting unit	Default payment source
Payroll EFT Source US Bank A - Account 7890045	None	Yes
Payroll EFT Source California Bank B - Account 1238900	California TRU	No
Payroll EFT Source Texas Bank C - Account 8765999	Texas TRU	No

The first payment source 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 having a default payment source, consider the following examples that describe what happens when a TRU changes, causing a payment rule to be invalid.

What you can do	When you would do it
With a default payment source, the payment process pays employees using 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. This ensures you use the appropriate payment source to fund the payment.	This approach might suit a company with strict policies about payment rule compliance.

Organization Payment Methods Task

You must create one OPM for each combination of legislative data group (LDG), payment type, and currency that you use to disburse wages and other compensation. You can also create rules for validating or processing the distribution of payments. Create as many OPMs as you require for your enterprise. Use the Organization Payment Methods task.

To define OPMs:

1. Start the Organization Payment Distribution task.

2. Click Create.

3. Select the LDG associated with this payment method.

4. On Create Organization Payment Method, enter the required info.

   Field name	How you use it
   Name	Enter the name of this OPM.
   Payment Type	Select the payment type for this OPM. You must create a separate OPM for domestic and international payments. Use the Direct Deposit payment type for domestic direct deposits and the International Transfer payment type for international payments. Two EFT templates are available. PPD for US Payments IAT for international payments
   Currency	Select US Dollar.
   Prenotification required	Prenotification is the process of submitting a 0 USD transaction in order to verify an electronic transfer's routing numbers and account number info. Use this field to indicate whether a prenotification process is required for direct deposit payment types. For further info, see Prenotifications for the US in the Help Center.

5. If you have selected Direct Deposit or International Transfer as the payment type, in Electronic Funds Transfer File Information, enter the appropriate values.

   Field name	EFT name	What it does
   Balancing Entries	Balanced Electronic File	Determines whether the payroll process generates a balanced or unbalanced electronic payments file. An unbalanced electronic payments file doesn't have an offsetting debit record. It therefore allows cases where the total debits of the file aren't equal to the total credits. Some banks require unbalanced files.
   Bank Reference	Immediate Destination Identification	Identifies the immediate destination bank routing and transit number.
   Bank Name	Immediate Destination Name	Name of the financial institution.
   Company Reference Type	Immediate Origin Identification Type	Don't use this field.
   Company Reference	Immediate Origin Identification	Numeric code assigned to the employer by an external authority, such as their IRS tax ID or D-U-N-S number.
   Company Name	Immediate Originator Name	Identifies the company name of the originator.

6. Configure prenotifications for Direct Deposit payments, if necessary.

   For further info, see Prenotifications for the US in the Help Center.

7. In Payment Sources, click Create.

   Payment sources associate bank accounts and other sources of funds with the OPMs. Each organization payment method in use must have at least one valid payment source.

8. On the Create Payment Source page, enter a name and select a bank account name.

   The payroll process uses the payment info set at the payment source level for direct deposit employee direct deposit.

9. Enter the required info, and click Submit.