The Bankers Automated Clearing services, usually identified by the abbreviation BACS, is an organisation for processing payments in Great Britain and Northern Ireland. It is not for profit, and the scheme was originally created to process electronic payments, lessening the need for paper documents where the transfer of money is concerned. According to its official website, 5.6 billion bacs payments were effected in 2009 alone, accumulating a total value of £3.83 trillion. Sizeable, individual companies are likely to make thousands of such payments, to the value of hundreds of thousands, or even millions, of pounds each year. For such large companies, processing these payments can constitute a significant obstacle in terms of administration and paperwork. Accounts payable teams can, if the situation is not checked, and an adequate solution devised, end up swamped in stressful, confusing, and tiresome paperwork. It is for this reason that many companies choose solutions involving specially made bacs software.
Bacs is the best method of payment for managing automated payments to and from repeat suppliers and customers. Also, of course, it is good for managing salary payments, because of their regularity and consistency. In fact, there is a good chance that your salary has, at some point in your working life, been paid through the scheme, as this is how the majority of the UK workforce is paid.
When accounts payable is run badly or on inadequate software in a company, this can have a knock-on effect that trickles through the entire range of aspects of that particular company. Worse, it can result in payment errors and vulnerability to fraud. The scheme provides a rigorous approval process for would-be software suppliers, to make sure that their software is adequate. There are several criteria, among which is the authentication of parties that communicate with Bacstel-IP, or, in the case of faster payments, Secure-IP. When a software supplier satisfies this and many other requirements, it will have permission to use the ‘approved software’ logo.
The bacs scheme is an effective way of processing large numbers of secure payments. Your company’s bacs software needs to come from a fully authorised supplier, otherwise you are at risk from insecure bacs payments and payment errors costing noteworthy amounts of money.
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