This article is written for public benefits. If you read this article, it will give you a clear idea about BACS Payment.
BACS, otherwise known as Bankers automated clearing services, refers to the quick and electronic process of depositing money into your account as well as withdrawing it. The idea of BACS is to allow you to contribute your pay check directly into your bank account and gives you the ability to send checks to others.
When you pay for things online such as an electric or insurance bill, youll be using the details of your bank and your account number to use the BACS payment system. The numbers on the bottom of your checks both identify your bank and your account. Any contributions to your account go to your bank first and then it is automatically deposited into the named account. When you pay a check online it automatically notifies your bank the details of the direction of which bank and account youre sending it to. BACS payment system has proven itself to be highly efficient and trustworthy and has a record of no errors since it was created back in 1968.
BACS payment system eliminates the need for any paperwork, having to write cheques and the use of administration staff and saves a significant amount of time. The service takes a minimum of 3 banking days with the first day to enter it into the system, the second day to process it and the third day to clear it. It proves most effective for large organisations that need to make a large number of transfers each day. Using the BACS process will deal with these transfers in an accurate and timely manner.
Whatever the size or nature of your business, once you gain approval for Direct Credit transactions from your bank you are free to use the BACS payment system. Direct debit is used to pay for wages, salaries, supplier payments, pensions, Inland Revenue payments and expenses. It is an instruction from a customer to their bank or building society authorising an organisation to collect varying financial amounts from their account.
The Costs of using BACS as your payment system vary according to your bank. Some banks offer BACS free of charge whereas others charge for both a file and transaction. You can negotiate with your bank relationship manager to negotiate any charges that will be applicable to your business.
So to recap, here are the main benefits of using a BACS payment system:
Save time, cut costs Improved cashflow Secure payment Regular automated payments Less risk of loss or late payment