Toast Payroll: Configure Vendors

In this Article:

• Vendor Basics
• Set Up a Vendor
• Tie a Deduction to a Vendor

Vendor Basics

A vendor is a company or organization that accepts payment on behalf of a client. In Toast Payroll, vendors are organizations in which payment is sent from payroll via live check or direct deposit. Vendors are most often used alongside garnishments because garnishment orders can direct funds to be sent to an agency.

If your company receives a new garnishment order, Toast Payroll Customer Care can add the direct deposit account details or the check mailing address to handle the payments when processed on the payroll. If a garnishment or HSA (Health Savings Account) deduction is withheld on the payroll with a vendor included, the amount will be transferred directly to the vendor.

Common examples of vendors include child support agencies, courthouses, attorneys, federal agencies, some retirement programs, and HSA organizations. However:

• Toast Payroll does not send medical payments to vendors on behalf of our customers. 
• 401(k) providers or state programs (such as the CalSavers State-Mandated Retirement Plan) program cannot be set up as a vendor through Toast Payroll.

Set Up a Vendor

1. To set up a vendor, navigate to Settings > Payroll > Vendors. Now select Add+.
   
   
   
   
2. On the setup page, add in the following fields for the vendor: 
   1. Name: Agency name that will receive the funds.
   2. Address: Only needed in the case of a check being printed to the agency. If the funds are being sent through direct deposit, leave the address field blank.
   3. Bank Routing #/Bank Account #: Needed if the funds are being sent via direct deposit. If a check is sent for the funds, these fields will be blank.
   4. Account #: If an account number is applicable, enter it here.
   5. Pay:  This is an important field and should reflect the information that was entered for the vendor.
   6. None: If funds should not be send and will instead be held.
   7. By Check:  If an address was entered for the vendor and a physical check should be printed and sent to the agency.
   8. By Direct Deposit:  If a routing and account number were added above, this selection should be made to ensure the funds flow through ACH (direct deposit).
   9. Account Type: This is typically held at the default of Checking
   10. Is Active: This flag should only be chosen after the vendor has been setup. 
   11. Is this a child support vendor?:  This should be flagged as Yes if a case number should be included with the check. This flag will ensure that the number included in the case number is printed on any checks sent to the agency.
   12. FIPS Code: This is a 5 digit code used to properly identify child support payments. If a FIPS (Federal Information Processing Standard) Code is is listed on the child support order, enter it here.
   13. Upload Attachment: Typically left as multiple garnishments can use the same vendor.
3. Once the fields have been added, select Save at the bottom of the page. 

Tie a Deduction to a Vendor

Once a vendor is set up and activated, it can be added within a (and tied to that deduction code) so any funds garnished are sent directly to an agency or specified location. If an employee deduction is tied to a vendor, once the payroll is processed, the funds will be sent to the agency. 

Note: If a deduction is not tied to a vendor, but a deduction is taken via payroll, a check/vendor payment will not be generated. Instead, you will be responsible for remitting payment to the agency(s). Deductions not tied to a vendor indicate that the funds have been deducted from the employee, but not deducted from your account towards a vendor. Therefore, Toast Payroll cannot facilitate remitting to a vendor. It is important to follow the steps below to tie a vendor to the deduction.

1. Navigate to the employee’s profile and select Recurring > Deductions.
   
   
   
   
2. Select Add+ and select the deduction code from the deduction drop-down.
3. In the Vendor dropdown, select the appropriate vendor that funds need to be sent to for this deduction. The vendor will also appear on the vendor report once the payroll has processed.
4. Add in any other applicable information (eg. Amount, Adjusted Limit, Case Number, etc.). Use the info buttons next to different fields to learn more. If you have additional questions, contact us via the blue chat dot in the lower-right corner of any Toast Payroll page.
5. Select Save to finalize.
   
   
   
   
6. The deduction will pull through to payroll, and once processed, Toast Payroll will automatically send the funds to the vendor via check or direct deposit, depending on the payment type.

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.