bacs is a catch-all term that describes a number of different types of electronic payment. Bacs payments will generally be a direct debit or credit. In the past 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 overtaken these, since it is nearly 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 extremely secure, with many different means of security built into it. Additionally, there is the peace of mind that you will be given a full refund in the unlikely case that you are a victim of fraud.
For companies there are multiple benefits to using 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 quantities 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 specified date and arrive in the payee’s account three working days later. (Should you need a faster transfer there are other options, such as FPS or CHAPS, which incurs a fee.)
This also streamlines 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 fair idea of when money will come in. Bacs can also be integrated with many accounts packages, helping you to spend less time on your finances and get on with what really matters for your work.
Bacs software is supplied by different companies, each of which will need to meet rigorous criteria. As well as providing the required hardware and enabling you to make bacs payments, most should offer 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 major transactions, there are more and more benefits to be enjoyed by moving to a system of electronic payments.
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