Bacs payments are used to pay both salaries and pensions, and despite the introduction of Faster Payments, many businesses still use “Pay by Bacs” as their preferred method of payment.
The abbreviation for Bankers Automated Clearing Services, a Bacs payment is a bank transfer from one bank account to another and as a general rule of thumb, you can expect a Bacs payment to hit your account within 3 business days. If you choose this method of payment, you should also keep in mind that Bacs transfers only send Monday to Friday.
How do you make a Bacs Payment?
There are two different ways that you can process Bacs direct credit payments. You can either run a Bacs payment through your bank or alternatively, you can use a Bacs Approved Bureau to process your Bacs payments. Whichever option you choose to use, it’s important that if you make a Bacs payment as a business that you have signed up with BACS in order to gain a Bacs Service User Number, or SUN.
Do I need to apply for a Bacs User Number to make a Bacs payment?
Bacs Service User number status is not automatically provided however, it is worthwhile to obtain a SUN so that you can take advantage of cheaper fees, especially if you have more than 500 staff.
Some banks offer a non-SUN way to make Bacs payments however, the rates you can expect to pay are far higher than if you had a SUN.
What are the advantages of having a Bacs Service User number?
The main benefit of using Bacs payments is that they are cheaper per payment than any other method. And, you can also take advantage of the following payment methods…
- Same day payment (Faster Payment)
- Same day high value payment (CHAPS)
- Next day payment (Faster Payment)
- Future dated payment (Faster Payment
However, although there are lots of advantages of having a SUN, you must be aware that it is a complex, lengthy and expensive application process.
How to make Bacs payments without a Bacs Service user Number (SUN)?
If you choose not to apply for a SUN, it is still possible to make Bacs payments however, you can expect to pay around £0.35 per Bacs payment and this is capped by many banks at 250 Bacs payments per month. This tends to be the rules enforced by the vast majority of UK banks.
How do I sign up for Bacs with my bank?
In order to qualify for Bacs you need to apply for a Service User Number and the set up fee is around £250. As part of the set up process, your bank will run a full due diligence on your business.
Can Bacs payments arrive at any time of day?
The vast majority of Bacs payments will arrive in your bank account around 7am and if it does not show at this time, you will need to wait until the next working day. It can take up to three working days for a Bacs payment to clear.
What if I need payment to arrive quickly?
Bacs payments are processed between Monday and Friday and can take up to three working days for the payment to clear. If you need your payment to arrive more quickly, you will need to use Faster Payments.
What are Faster Payments?
As the name suggests, Faster Payments is a faster alterative to Bacs payments. These electronic transactions take just a few seconds and can be made online, over the phone, in brand, or via a self-service machine.
This initiative is a popular alternative to Bacs payments that allows users to move and receive money quickly and securely.
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Here at Easypaye, our team of skilled and experienced Payroll and HR experts are ready and waiting to answer any of your questions about all of your accountancy needs. To find out more, or to discuss our services, please get in touch.
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