Why Businesses Need Bacs Payment Solutions
To run a successful business, an efficient and healthy cash flow system is essential
, and for that a company needs to implement the right bacs payment solutions. Bacs, which originally stood for Bankers Automated Clearing Services, is a three day payments system whereby funds are entered on the first day, funds are then processed on the second day, and on the third day they are cleared. However, as of 2008, this system was updated in some banking systems to enable a virtually instant transaction service.Bacs payment solutions that incorporate a more instant method than the original system is essential for businesses that need to know what money is where, for efficient accounting, invoicing, and cash flow predictions. With money tied up in the banking ether companies, especially large ones, can find that thousands of pounds are literally unaccountable when doing important accounts, especially when the tax man wants to know what the end of year figures are.
One of the major causes of untraceable accounting was through cheques that had been issued. Cheques are an alternative payment method, but are gradually being phased out as they are costly to process and the money cannot be drawn until the cheque has been presented by the recipient. With some cheques being presented as much as 6 months later, many companies found that accounts were difficult to balance with a payment system that was out of their control.
Some of the new bacs payment solutions are integrated within a company's existing IT infrastructure to manage all forms of payments and collections with reporting, backup, and notifications. There is even the capacity for some systems to ensure that no payments are made outside preset limits, avoiding costly mistakes. As these systems are being designed to cope with a multitude of processes, they are also designed to be able to accept updated applications as the payments landscape changes.
Nobody can predict what these changes might be, but it is evident that as well as cheques being phased out, one day cash might be a thing of the past too. Finding another token of payment, which is all money really is, is inevitable, and as we head further into a digital world, it is likely that monetary transactions will be an objectless aspect of our lives too.
Having an instant and automated payments system not only frees up the cash flow of the business for more efficient trading, it enables more profit to be generated by cutting down the man hours needed to enter, process and clear any funds, as well as cutting down the amount of time it takes to invoice. Bacs payments solutions can manage, amongst other things direct debit payments, international payments, audits, accounting and reconciliation, reports and liquidity management to enable the finance department of a large company, or the director of a small company keep track of money in and out in real time.
Without such systems being put into place, a company risks losing money through missing payments, or miscalculating important financial information that could in both the long and short term be detrimental to the financial health of the business. And as any business savvy professional knows, miscalculations can lead to a company's downfall, especially in the turbulent financial times that are currently being experienced around the world.
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