It wasn’t so long ago that book-keeping was carried out manually – it actually was book keeping – and payments were made by cash or cheque. This was time-consuming and laborious, and vulnerable to errors that could cost you and your organisation a significant amount of money. Not only that, but dealing with cash or cheques could be insecure and slow. Fortunately, with the advent and popularity of bacs, this is no longer the case. Bacs payments are fast and secure, and bacs software can be integrated with most accounting software – meaning that all of your book-keeping practices can be neatly brought together so that there is no ambiguity and no surprises.
Bacs, or bankers automated clearing system, has been around for decades now but has only relatively recently been adopted on a large scale. Until a few years ago it was normal for employers – particularly smaller ones – to pay workers in cash or by cheque. In the 21st century there is no call for this, or for the problems it brings. Bacs payments mean that you do not have to keep large quantities of cash on the premises. Neither do you have to wait to have cheques countersigned, or have to wait for them to clear. Bacs is not instant, but it is predictable. (In fact, in many cases bacs payments will go through in just minutes, rather than the three-day standard. In any case, if you need quicker payments then the SWIFT system is available for an additional fee.)
You may be able to manage, just about, on your own without bacs. However, issues typically happen when you try to mix old with new – when you are paid by cash or cheque but your accounts are automated with bacs software, or when you don’t use bacs payments but clients and suppliers do. In these cases it is easy for payments to be overlooked, perhaps because one or other of you isn’t used to dealing with cash or paying in cheques, or else isn’t able to check accounts online and keep track of their cash-flow electronically. Since bacs has become the standard and most businesses and other organisations now use it, it makes sense to switch to this system. The savings of time and money it brings should soon pay for any one-off costs to your accounts department and will future-proof your organisation.
Please visit http://www.bottomline.co.uk/ for further information about this topic.
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