When you’re preparing pictures in Photoshop for use with PSD Import, you need to keep a few things in mind:

• You do not need to save the image in another file format, which means that you don’t have to flatten the layers.
• Create alpha channels or clipping paths for any contours that you might want to wrap text around.
• Create channels for areas where you might want to apply a different spot color or varnish.
• PSD Import cannot read layer information for certain images — including those that use layer effects. The composite image is used instead.