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The Prenote Process

Payroll | Aug 18, 2021
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Today, many employees are paid via direct deposit. By receiving their funds electronically, an employee avoids the hassle of cashing a paper check each pay period.

Instead of a paper check, an employee with direct deposit gets a statement that details their earnings and deductions. By using an employee self-service solution – such as MyStack – an employee can receive this statement electronically as well. This is an easy way for a company to move towards a paperless payroll.

But before an employee can use direct deposit, their account information needs verified. This is done through the prenotification process, or a “prenote.”

What is a prenote?

A prenote is a test transaction that a bank uses to validate account and routing information. This helps ensure that any funds are deposited into a valid account.


When is a prenote sent?

After you enter or update an employee's account or routing information, a prenote is sent with the next processed payroll.


How long does a prenote take?

The prenote process usually takes 10 days to complete.

During this time, the employee will receive a live paycheck.

Typically, an employee receives a live paycheck after signing up for direct deposit. This could continue for one or two pay periods. Once the account information is verified, an employee's pay will be direct deposited; that employee will no longer receive a live paycheck.

However, if an invalid account or routing number is detected, then the employee will continue to receive a live paycheck. After correcting any detected errors, another prenote is sent. This process is repeated until the account(s) are verified.

When is a prenote needed?

A prenote occurs anytime an employee signs up for direct deposit or when you edit an employee's existing account information.

Keep in mind, any time a prenote is sent for an employee’s account, that employee will receive a live paycheck. An employee will be paid by direct deposit once the verification process is completed and the account information is verified.

The following chart shows what actions lead to a prenote being sent:

Action Is a prenote required?
An employee signs up for direct deposit.
An employee adds another bank or an additional account to their current direct deposit.
You change an employee’s name, address, or other demographic information.
An employee switches banks.
An employee changes their deposit distribution
(i.e. instead of 10% going to a savings account, they make it 20% of their pay).