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Pre-Note

A pre-note (prenote) is a test case to process before actual electronic funds' transfers begin. From a process perspective, sending a pre-note is a test of employee direct deposit information. Physically, a pre-note is a record within an ACH file that has zero dollars and a transaction code indicating that it is a pre-note and whether it is defined as a checking or savings account.

Typically, the Net Pay Codes for direct deposits are defined to allow a pre-note.

The Employee Net Pay Detail has a field for the Pre-Note Expiration date. A pre-note expiration date is the last date for this test case to process for an employee's direct deposit. Without a pre-note expiration date that is before the check date, the direct deposit automatically is treated as live direct deposit information.

Will a Pre-Note Process?

A pre-note processes before it expires.

To determine if a pre-note or a live direct deposit will process, compare the Pre-Note Expiration date to the check date.

• No Pre-Note Expiration date:  If there is no pre-note expiration date, the employee's net pay for direct deposit is live. Leaving the pre-note expire field blank can be compared to entering a 01/01/1900 as the pre-note, and so the direct deposit net pay processes according to the standard net pay processing rules.
• Pre-Note Expiration AFTER the check date:  If the pre-note expires AFTER the check date, the direct deposit is pre-noted based on the Net Pay Code's setup to pre-note.  
• Pre-Note Expiration ON the check date:  No pre-note processes, and the direct deposit doesn't process.
• Pre-Note Expiration BEFORE the check date (even when the pre-note expiration is after the pay period end date):  If the pre-note expires BEFORE the check date, the pre-note is in effect and the direct deposit is pre-noted. When an administrator produces the ACH file, the employee record will be for zero dollars and will have the transaction type associated with a pre-note for checking or savings, based on the type of account defined on the Employee Net Pay Detail.

Is a Pre-Note Required?

For most banking institutions, sending a pre-note is optional.

Entering an appropriate Pre-Note Expiration Date on employee net pay details for direct deposit to cause a pre-note is recommended, but it is possible to skip the pre-note and begin processing live without a pre-note.

Can I Pre-Note a Second Payroll Run?

It is possible to pre-note a second payroll run. A pre-note will be created for every payment that has a pre-note expiration date after the check date for the payment.

To pre-note a net pay for direct deposit, on the Employee Net Pay Detail record that you want to pre-note again, define the Pre-Note Expiration date after the check date that you want to pre-note.