Bacs, or Bankers Automated Clearing Services, is the standard for transferring cash directly from one bank account to another. The advantages of electronic transfer are well known. Bacs payments are used by the majority of SMEs, although many smaller businesses still pay suppliers and accept payments in cash or cheque form. However, bacs software gives far greater reliability, as well as speed of transfer for funds. It decreases the incidence of errors, and also that of fraud.
When it was initially brought in, bacs offered payments from one account to another within three working days. Although this was a lot faster than cheques often cleared, in a 24/7 business culture it is now considered slow. Nowadays, the Faster Payments System (FPS) brings almost instant transfer, depending on the banks involved. (Bacs is generally used synonymously with FPS.) There are also guaranteed same-days payments through CHAPS, though these cost somewhat more and so are rarely worthwhile for small sums of money. Bacs is free and, in most cases, fast enough.
Businesses have turned to bacs for a number of reasons. Just one is that it makes it far easier to pay people and receive funds, whether from clients/customers or suppliers. The same applies for paying taxes and so on. Money is transferred straight from one account to another, instead of taking the intermediate step of cash or cheque form. That means that your accounts department don’t have to count out the money or write out the cheques, and they don’t need to be countersigned. These activities can take a significant amount of time and represent a source of serious error. In the worst cases, this can be employed by fraudsters who see an opportunity to make dishonest gain at your expense.
These are just a few of the advantages of bacs software. Ultimately, bacs payments streamline your organisation’s accounts department and allow it to function more efficiently. This clearly has savings for your bottom line, as well as the amount of time that people spend on day-to-day issues to do with accounting. Bacs is a fast and safe means of shifting money and is protected by many layers of security, so there are few reasons for anxiety: in the unlikely event of a genuine problem, you are assured a refund. Most larger organisations have already adopted it, but smaller ones will enjoy the benefits of lower bureaucracy and faster, more reliable transfers.
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