Businesses operating in today’s competitive commercial climate know that stabilising financial performance can be a complex task. There are multiple economic challenges on the horizon and traditional or outdated financial tools may not be capable of managing these intricacies effectively.
The latest business leader research suggests that organisations of all sizes are navigating choppy financial waters, but are looking to adopt more efficient technologies to support their objectives. In fact, 60% of UK businesses report that they recognise the long-term benefits of new technology integration.
For financial organisations and enterprises that operate using Bacs payments, the use of Bacs solutions can help to transform productivity and streamline payment processes through real-time payment flows and audit trails.
In this article, we explore the operational efficiency that Bacs solutions can deliver, alongside improved financial performance for businesses that process payments with Bacs.
Contents
- What are Bacs solutions?
- Key issues that may affect financial performance.
- 5 ways Bacs solutions improve financial performance.
- Enhance financial performance with Bacs solutions from Interbacs.
What are Bacs solutions?
The Bankers’ Automated Clearing Service, or Bacs, is an electronic payment service operating in the UK. It helps to process payments between UK bank accounts. These services include:
- Direct Debit, where money is taken from one account and sent to another account.
- Direct Credit, where money is paid into a bank account from another account.
The Bacs system is managed by Pay.UK and is known to be a highly secure and cost-effective system when it comes to making, receiving and overseeing payments. The service can handle extremely large volumes of payments, which are typically non-urgent in nature.
Bacs solutions are based around the two main payment types: Direct Debit and Direct Credit. Businesses can use Bacs solutions in numerous ways, including:
- Bacs-approved software: organisations integrate specialised software into their existing systems to import and submit Bacs payment files.
- Bacs-approved bureaus: enterprises partner with bureaus, such as Interbacs, who directly submit payment files to Bacs on the business’s behalf.
- Online banking systems: some banks may offer online banking solutions for Direct Credit payment submission.
Key issues that may affect financial performance
Traditional methods of payment processing are commonly acknowledged to create obstacles to better performance and productivity for enterprises. These older ways of working could generate inefficiencies in cost, time and overall workflow for many organisations, such as:
Repetitive task overwhelm
Manual Bacs payment processing can multiply the time your teams spend on repetitive tasks. These include long-winded manual payment entry information, payment reconciliation and transaction checks for accuracy. Your finance teams are likely to be spending significant amounts of time on tasks that can be easily automated.
Elongated payment processing time
When Bacs payments are manually completed, there may be many different systems and portals your teams have to manage to enter payment data. Correct formatting of payment details and bank information takes time that could be used for more productive purposes.
Restricted productivity
The transfer of payment information between portals, spreadsheets and software systems means that workflows are bogged down in manual data entry. It’s fair to say that this can impact your organisation’s ability to increase productivity and realise valuable business goals.
Payment volume deluge
As payment volumes increase over time, many manual Bacs processes struggle to cope with the sheer amount of payment information management. Your finance teams may have to finely balance the critical jobs of entering payment information and ensuring all information is correct, alongside meeting compliance requirements.
5 ways Bacs solutions improve financial performance
Clearly, the operational efficiency Bacs solutions deliver for enterprises can generate measurable benefits, including the following 5 major advantages:
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Reduced costs
Automating Bacs processing via a Direct Debit Management System (DDMS) reduces the amount of time employees spend on manual processing and actioning reports, thereby creating cost savings and increased productivity.
Once these tasks are reduced or replaced via automation, your teams can focus on wider business priorities, with the added benefit of a reduction in processing human error as a result of automation. Money can also be saved via using a fully automated, end to end "lights-out" solution like HSM which can process all of your Bacs payments without any human intervention.
Improved cash flow management
Automated Bacs solutions offer real predictability when it comes to payment completion by accurately forecasting cashflow, collections and scheduled payments.
When your business knows what payments will be delivered and the specific date periods for these transactions, cash flow management becomes transparent and easier to perform, creating opportunities to grow and scale.
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Increased security
With automated Bacs solutions, there is an in-built capability for stronger security and compliance checks. Offering greater financial oversight, integrated security measures, like data encryption, reduce fraud risk and the possibility of data breaches.
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Enhanced productivity
Time and cost savings are integral to your business’s ability to focus on productivity scope, with more time to forecast, plan and prepare for future growth opportunities. In addition, the scalability potential of Bacs solutions ensures that, as your business grows and processes higher payment volumes, your systems cope efficiently.
In addition, the compliance your organisation can achieve through Bacs rules alignment empower you to become more streamlined, with simpler auditing and validation processes. Tasks such as file validation, approvals and signing files are automated, redeploying saved time and employee resources to other business-critical activities.
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Amplified financial insights
Bacs reports deliver rich troves of payment information and keep you up to date with payment failures, missing payments or changes in payment information. These reports can feed into future planning, ensuring that you can track cash flow patterning, leading to smarter and more informed decision making.
Magnify financial performance with Bacs solutions from Interbacs
With automated processes that boost productivity and minimise errors, Bacs solutions from Interbacs deliver effective and powerful payment processing tools. These solutions help maximise processing fulfilment and reduce your administrative burden to boost your enterprise’s financial performance.
With a proven track record in successful Bacs payment management for all types and sizes of businesses and with a compelling industry reputation, Interbacs are well positioned to support all of your business account needs.
Contact Interbacs today for a personalised consultation and discover how we can optimise your direct debit processes.
