Direct Deposit Systems: ACH Payroll vs. NPC Payroll

ACH payroll is the direct deposit system based on the Automated Clearing House, an electronic network managed by the National Automated Clearing House Association under the guidance of the Federal Reserve. This ACH system processes huge volumes of qualifying financial transactions—both commercial and governmental—including employee payroll as well as other kinds of direct deposits and debits. In 2015, the system processed 24 billion payments totaling more than $41 trillion.

Direct Deposit Systems: NPC Payroll vs. ACH Bank Payments

In the end, NPC payroll is still based on ACH payments. The National Payment Corporation (NPC) is itself one of the larger users of the ACH system. What’s different about this direct deposit system is that it doesn’t involve going through a bank. Your small business may use a credit union or banking institution that you otherwise like except for the direct deposit fees and agreements. NPC can be a great alternative. It can also be a great cost-comparison tool for the fees offered by your bank. Either way, you’ll need to set up an authorizing account before direct deposits can begin.

Payroll Processing Beyond Direct Deposit

Whether it’s done with direct deposit, paper check, or pay card, the actual financial transaction is only one of the numerous steps that go into payroll processing. The final check amount typically reflects several adjustments, both deductions and additions, some of them mandated by the federal or state government, some of them to help your company make its employee recruitment and retention goals. You’ll then need to deposit your tax withholding liabilities with the federal and state government in a timely fashion. This payroll information must also be aggregated from one pay period to the next so that quarterly and end-of-year tax liabilities are accurately reported and reconciled. Finally, record keeping of employee and payroll information is best maintained for up to 7 years to ensure the employer can comply with all of the applicable record keeping requirements.

NPC and ACH Payroll Software from AMS

Advanced Micro Solutions recognizes that our business customers may choose to use NPC payment accounts or ACH payroll with their banking institution when setting up direct deposit. That’s why AMS Payroll is compatible with both. Check out some of the most popular features that come with our payroll system:

  • State and Federal tax tables are updated as needed.
  • Up to 40 User Defined Fields for deductions/additions.
  • Processes direct deposit, paystub vouchers, as well as over 30 different types of checks.
  • Prints MICR checks – with Software Generated Forms.
  • Supports Federal payroll forms such as the 941, 940, 943, 944 and 1040 Sch H. See complete forms list.
  • Includes SUI forms for all 50 states, the District of Columbia See complete forms list.
  • Includes the ability to magnetically/electronically file 941, 944, and 940 forms as well as state quarterly returns.
  • Tax deposit information and disbursements can be recorded.

Learn about our powerful platform software and our catalog of add-on modules. You can then pick and choose the software that makes the most sense for your payroll and accounting service needs. You can also download our free demo, or talk to our Sales and Information team at (800) 536-1099.

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.