Your Bacs questions answered

What is Bacs?

Bacs is a United Kingdom scheme for electronic financial transactions. Bacs Payment Schemes Ltd began life as Bankers’ Automated Clearing Services, or Bacs for short.  

 There are two main Bacs services for businesses: Direct Credit and Direct Debit. Direct Credit enables businesses of any size to make payments, such as payroll, while Direct Debit enables them to collect payments, such as bills or subscriptions.

Bacs touches nearly every adult in the UK. Nearly 90 per cent of the workforce is paid using Bacs Direct Credit, and Bacs processes a billion benefit payments per year. Almost nine out of ten people have at least one Direct Debit, while nearly three out of four household bills are paid this way.

Why use Bacs?

Bacs enables business to make or collect payments electronically - quickly, simply and securely.

  •  It’s quicker and cheaper than preparing, checking and sending – or receiving and banking - cheques.
  • You decide when each payment will be made or collected.
  • It improves your cashflow management – you know exactly when funds will leave or arrive in your account.
  • You can pay and collect variable amounts.
  • It can reduce reconciliation work.

How does Bacs work?

Bacs transactions take three working days to clear: they are entered into the system on the first day, processed on the second day, and cleared on the third day. For the whole process, from the moment you upload a file via our portal to the moment the payment arrives, check out our information on making payments or collecting payments.

Who can use Bacs?

Most businesses. You might be surprised the learn that the size and nature your business is irrelevant. At Cashbacs we have clients ranging from sole traders to multinational organisations.

What is Bacs Direct Credit?

Direct Credit is mainly used for paying wages and salaries - in fact over 90% of the UK workforce is paid via Direct Credit. In total, Direct Credit is used for paying four million wages every week and nearly 25 million salaries a month. Direct Credit can also be used for supplier payments, pensions, Inland Revenue payments and expenses.

What is Bacs Direct Debit?

A Direct Debit is an instruction from a customer to their bank or building society authorising an organisation to collect financial amounts from their account. This can be used to ensure regular, safe and efficient payments of anything from household bills to charitable donations.

 Businesses use Direct Debit to collect payments automatically, on time and for a low cost:

  • Regular payments where the amount changes each time, for example household bills based on usage
  • Regular fixed payments, for example gym memberships or payments on account, where the customer is spreading a cost over several months.

What is a Bacs bureau?

A Bacs approved bureau has been accepted by Bacs to submit transactions on behalf of businesses. Bacs maintains a directory of approved bureaux, and inspectors review the bureaux regularly to ensure they meet the standards set by the scheme.

Why use a BACS bureau? 

According to Bacs, over half of the organisations using the Bacs service choose to make their payment submissions through a Bacs approved bureau rather than submitting directly to Bacs.

 Organisations choose to use a Bacs approved bureau for a number of reasons. They:

  • May only make a small number of Direct Debit and Direct Credit transactions each month, making a bureau the more cost-effective solution
  • Might be unable to fulfil all of the criteria to be able to make direct submissions themselves to Bacs
  • Simply want the extra support of a Bacs expert taking care of their payments.

How does a Bacs bureau work?

A Bacs bureau submits transactions on a business’s behalf. It may also provide extra services, like reports. At Cashbacs, we use our expertise to help clients throughout the process, with phone and email support available from 8.30am to 7pm on all English banking days.

Do I need Bacs software?

No, not when you work with a Bacs approved bureau. Cashbacs clients use our secure web portal to manage all their transactions, so no need to buy, install or maintain Bacs approved software.

What is a Bacs Service User Number (SUN)?

A service user number (SUN) is how Bacs identifies your business. It is a unique number for all communications between your business and Bacs and stored to create records of transactions.

Do I need a Bacs Service User Number (SUN)?

To make payments through Bacs Direct Credit you will need a SUN, even if you use a Bacs approved bureau. To collect Direct Debits, you can use our Facilities Management service even if you do not have a SUN.

How do I get a Service User Number (SUN)?

You need to contact your bank or and ask for an Indirect Submitter’s application form. There are different criteria for each bank to meet their requirements for a SUN but broadly speaking, you can liken it to applying for a credit card – each request is based upon individual circumstances.

Can I transfer my existing SUN to Cashbacs?

Of course. Please contact your bank’s Bacs department and ask them to add Cashbacs to your SUN. Our Bureau number can be requested from the support team.

What is AUDDIS?

The Automated Direct Debit Instruction Service (AUDDIS) enables organisations to send or cancel Direct Debit Instructions to their customers' bank electronically, instead of in paper format. AUDDIS automates the transfer of Direct Debit Instructions from the organisation collecting the payment to the paying banks and building societies via the Bacs service. With AUDDIS, the organisation keeps the original signed Instruction and electronically sends the details to the customers' bank to validate and, if accepted, set up the Instruction.

By automating the exchange of Instruction details between organisations and banks, there’s less manual handling and fewer errors.   

Any invalid Instructions rejected by the paying banks and building societies are returned via the Bacs service using ADDACS (Automated Direct Debit Amendment and Cancellation Service) report.

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