A brief overview of Bacs
Bacs is an acronym for Banks Automated Clearing System and was initially set up by the banking industry in the UK, as a safer and more effective method of processing payments of multiple fiscal transactions. It enables companies to make payments directly to another bank or other accounts. Bacs is used in making regular payments such as pensions, state benefits, tax credits – not to mention automating payroll systems. Such systems as Bacs are gaining large popularity and replacing paper-based methods of cash transfers.
The use of direct payment makes it so that you can have greater governance as well as visibility of payments made and collections gathered.
Bacs payment software may quickly take over transaction process due to the number of benefits it’s use has. Some of which include:
- It is a more secure platform; its different from cheques or even cash which can be lost or pilfered, when using Bacs, money reflects in your account the day it was expected to.
- Bacs systems save time and resources as the administration time used in serving clients is cut off. Besides, clients do not have to spend time in the banks depositing cash and cheques. With the use of automated Bacs software, the conception and the endorsement of a payment file is easy and inexpensive. This makes it a cost-effective way of making payments.
- There is no room for human error as it’s automated, making it more reliable.
- Manual intervention is unnecessary unless you want to make a specific change to a payment.
- You can easily change the users on the software and input new information.
- Set up of the software is extremely fast.
- You can use multiple banks meaning you have greater freedom and can meet the needs of a wider range of clientele.
- No additional 3rd party fees (e.g. additional bank charges).
Although cash payments (and cheque payments to some extent) are still popular amongst customers and businesses, online methods of transaction are rapidly becoming the norm. With Bacs, there is reduced time consumption and both parties involved in the transaction can feel the benefits.
How Bacs works
To make a Bacs payment, the basic and most vital information you need is the sort code and the account number of the payee’s bank.
Secondly, the payment data, which incorporates the above data in addition to the sum of every payment either directly or through a bureau is submitted. This should be inputted between 7:00am and 10:30pm.
The information is subsequently sorted into payments that will be made to each of the banks and later transmitted. This information is then downloaded into the computer. It is applied to the relevant client’s accounts and is then debited to yours. Overall, the procedure is quite simple and efficient. In short, once a transfer is made, it will take a total of three days for it to reflect on the account it has been transferred to.
Reports can be downloaded instantly through the software, so managers can easily reflect on the month’s expenses and make cuts to areas that stick out. The days spent sorting through spreadsheets and paper documents to get an accurate overview of company finances can finally be thrown away, as Bacs has it all in one efficient system.
With the apparent technological advancements in business, it is evident that the Bacs system and other automated payment options represent the present and the future of making payments. When you choose to introduce Bacs to your organisation, the basic thing to do is to consult with your bank who will guide you on the most suitable and financially savvy method for your business. Additionally, they will be in a better position to advise you on the infrastructure and improvement on existing facilities you will be in need of. They will likewise furnish you with all the procedural data you will require before giving you a go ahead to begin using Bacs.