BACS payments can be confusing at times. Understanding the role BACS agents play in the payment process can be difficult to understand. This guide will help business owners and those in control of payments to make the right choice on whether to move to Cox & Co.’s BACS service or continue to make the payments themselves.

The obvious advantages are your employees and employer liabilities will continue to be paid whether you are in work or on holiday. It’s a great way of reducing stress and removing the burden of tasks that need to be completed in the payroll process. But let’s look at the process a little deeper.

Using Bacs payments

What does BACS stand for? BACS stands for Bankers’ Automated Clearing System. It’s a regulated payment system run by Bacs Payment Schemes Limited and is one of the most common ways that money is sent and received from bank to bank. To use the system other businesses setup their own software to control files being submitted and to setup the vendors and recipients.

BACS is by far the most widely adopted payment type for paying employees. It’s utilised by organisations across the UK. A BACS approved bureau allows businesses to submit their payment files directly to third party software providers who then execute payments on behalf of your business.

Which BACS bureau does Cox & Co. use? Cox & Co. use the services of CashBACS Ltd. We upload the files to their portal and CashBACS submit these into the BACS system. CashBACS have Santander bank approval, their own software and most importantly BACS experts to help payroll bureaus such as ours when there are issues with the authorising bank. Expert help is especially important if a client’s bank account doesn’t have sufficient funds to pay their employees.

BACS is a 3 day payment cycle. For example to pay employees on a Friday, the files must be submitted by 4pm on the Wednesday before. Once the file has been submitted, it cannot (without cost) be extracted from the BACS system and the payments will continue to be processed. This lead-time can cause problems for organisations if they cannot get their payroll authorised in time for the submission deadline.

This 3 day lead-time can cause problems for organisations who may experience the unfortunate situation where employees fail to return to work after the payment file has been submitted. Organisations who pay earlier in the month for the period up to the last day of the month. (eg: paying employees on the 25th of the month for the period 1st to last day of the month) are also at particular risk whether paying by BACS or by Direct Payment themselves.

How to get a Bacs number
Obtaining a SUN takes around 1-3 months as the process requires the bank to perform due diligence on the requesting business. Some banks may have revenue thresholds that you will need to hit in order to qualify. The bank approval is given when a business is issued with a Bacs Service User Number (SUN). This is your company’s identifier within the BACS system.

To enable Cox & Co to process BACS payments for your business we will require you to provide us with your BACS Service User Name (SUN). It’s important that you register with your bank as an “Indirect Submitter”.

Join the thousands of businesses who have eased their payday blues

There may be a few hurdles to get through when setting up BACS with your bank, but once the SUN number has been issued it really does become an easy process to adopt.

As your authorised BACS agent we will ensure all of your employee and employer payments are taken care of every pay cycle. Never again will you have to worry that you’ve booked a holiday or are off sick. The payment cycle will continue and your biggest assets (your employees) will be reassured you’ve got their best interests at heart – being paid on time really is an easy win!

Ready for BACS? Ready to speak to us?

Get in touch with us to discuss how BACS can really remove the worry of employee payments from your role.

Telephone 0117 9323444 or email tracy@payrollsolutionsltd.co.uk