Just Payroll Services is a Bacs approved bureau. But what does that mean? What is Bacs? And how does it make your life easier?
What is Bacs?
Bacs (Bankers Automated Clearing Services) is a way of transferring money from one bank account to another. It’s not the only way of transferring money, but it is the UK’s favourite way of paying wages. Over 90% of the UK workforce is paid via BACS. It’s also the system behind more than a billion benefit payments.
How do I use Bacs?
There are two ways of using Bacs: one is for taking money via Direct Debit and the other for paying it via Direct Credit. For paying wages, suppliers etc, you’ll use the Direct Credit system. For that, you’ll need the name of each payee’s bank, the amount to be paid, their bank account number and their sort code.
To access the system and send a payment you need to use approved software. You can buy this yourself or you can choose an approved bureau which already has a licence to access the system – such as Just Payroll Services.
Once the payment details are sent, the Bacs system distributes the data to each bank ready for the money to be debited from your account and credited to the payees.
How long does a Bacs payment take to process?
Three days. Day one is when is when we submit our file to Bacs which details the payments to be made. Day two is when the Bacs takes receipt of that file for processing and distribution to the paying banks. And day three is when payments are settled.
For every company using Bacs, payroll deadlines (whether you process your payroll in-house or use an outsourced provider) are effectively driven by those three days.
Is Bacs safe to use?
The Bacs website notes that “Unlike cash or cheques, Bacs Direct Credit payments cannot be lost, stolen or delayed in the post.” Which, in this age of cyber paranoia, seems to rather miss the point. Bacs may be safer than cash or cheques, but how secure is the system?
Happily, the answer is very. Bacs uses SSL encryption, is password protected, constantly monitored and is only accessible via software pre-approved by Bacs. Getting access to that software (and having the experience to use it effectively) if you don’t already have it is one of the big advantages of working with a Bacs approved bureau like Just Global Services.
Benefitting from Bacs
Bacs maintains that one of the key benefits in using its service is the time, cost and cashflow-saving aspect compared with paying staff by cheque. That may be true – and some businesses do still pay by cheque – but the number is dwindling.
Far more beneficial, we would argue, is the reduction in admin and reconciliation – yet there’s even more benefit to be gained when you reduce the payroll admin long before the point of payment.
Bacs removes the admin hassle of physically arranging payment. But it doesn’t remove the burden or preparing the data that will ensure your people get paid. Outsourcing payroll, on the other hand, does both.
So to truly realise the benefits of Bacs, consider outsourcing your payroll too. Talk to us about that now.