bacs is a catch-all term that describes a number of different kinds of electronic payment. Bacs payments will often be a direct debit or credit. Previously bacs software was also used for payments over the internet via online banking and over the phone. However, since 2007 the Faster Payments Service (FPS) has surpassed these, since it is virtually instantaneous (whereas bacs takes three working days).
Bacs is generally still the default for many kinds of regular payments, such as pay cheques and utility bills. The process is highly secure, with many different layers of security built into it. Additionally, there is the peace of mind that you will receive a full refund in the unlikely case that you are a victim of fraud.
For businesses there are numerous benefits to adopting bacs, instead of working with more ‘traditional’ methods of paying employees and suppliers – such as cash and cheque. Security is obviously one of these. It is no longer necessary to keep large sums of money on the premises, thereby reducing risk as well as the insurance payments you would have to keep up to protect you from theft. Reliability is another; bacs payments leave your account on the arranged date and arrive in the payee’s account three working days later. (Should you need a faster transfer there are different options, such as FPS or CHAPS, which entails a fee.)
This also smooths accounting processes, since it makes for very predictable outgoings. You know exactly when and how much money will be leaving your account – and, if you are paid by bacs, you will have a good idea of when money will come in. Bacs can also be combined with many accounts packages, helping you to spend less time on your finances and get on with what really matters for your business.
Bacs software is supplied by different companies, each of which will need to meet strict criteria. As well as providing the necessary hardware and enabling you to make bacs payments, most should give some form of training to help you make the most of your new bacs capabilities – thus saving you time and money as well as decreasing the risk of fraud to your business. As fewer and fewer businesses still use cash and cheques for their main transactions, there are more and more benefits to be enjoyed by moving to a platform of electronic payments.
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