A guide to adding Bacs processing to your payroll service

Payroll service providers play a crucial role in ensuring accurate payroll payments. 

In this blog, we explore the service and commercial benefits of making Bacs processing part of your outsourced payroll service, and how to implement it. 

 

In-house v outsourced service


Whether your payroll is handled by a dedicated in-house finance team, or outsourced to an external payroll service provider, once all the calculations have been made the final step is to deposit funds into the employees’ bank accounts, on time and correctly every time. 


If payroll is managed internally, these payments are handled within the organisation’s own Bacs procedures.  

But if the payroll function is managed by an outsourced service provider (OSP), there’s an additional step in the process.  The OSP will need to send the administered payroll information back to their client for them to process the payments internally. 


To streamline operations and enhance customer satisfaction, many payroll providers take the smart step of offering Bacs processing as part of their payroll service.  This gives their clients the choice of a more comprehensive end-to-end service and avoids the risks associated with transferring sensitive data from payroll service provider to client. 



Bacs, the No 1 choice for payroll payments 


Bacs is an electronic payment system in the UK that enables businesses to make payments directly from one bank account to another. It provides a quick, reliable and cost-effective way to process multiple payments, and is the mechanism used for most salary and wage payments in the UK. 


Bacs processing is more convenient than other payment methods such as cheques as it’s less admin-intensive and offers better time and cost efficiency. 



Choosing the right software 


To integrate Bacs processing into your outsourced payroll service, you’ll need an approved partner that can supply the necessary software. 


Look for a reputable provider with a track record of secure and reliable services. They ensure the necessary features and functionality are in place to facilitate the seamless electronic payment transfers. There will be several options available depending on your requirements such as choosing between on-premise or cloud, as well as features such as automation, validation and HSM services.


To help you, check out our guide on How to choose the best Bacs supplier for your business which sets out the key elements to look for in your software and partner of choice. 



Create joined up systems: Integration 


After successfully selecting a software provider, you’ll need to consider how the Bacs software and services will integrate with your current processes and systems  

 

If you have chosen the best Bacs supplier for your business, they will work closely with you to ensure a seamless transition and ensure that any customisation will be taken care of. Depending on your current set up, you may choose to use an API (Application Programming Interface) to link your payroll software with the new Bacs software, which would offer efficiency and data management benefits.   

 


Security and data protection 



As a payroll provider, you will deal with sensitive personal data on a daily basis so security and data protection will be front of mind. Robust security measures, including encryption, access controls, and regular data backups are essential as well as regular audits to ensure compliance.  


 

Ways to enhance the Bacs process for payroll 


The best Bacs approved software solutions offer a range of tools and functionality to help enhance your payroll procedures and boost operational efficiency.  

 

  • Workflows: Automated workflows take the manual effort out of the Bacs payment process while still keeping you firmly in the driving seat.  Without any loss of control, automating the routine steps saves time, avoids delays and makes the process more efficient. Find out more about automating Bacs procedures. 

  • Bank account validation: Whether you are accepting direct debit payments from your clients, or processing payroll payments on behalf of your clients, checking the accuracy of bank details at the point you collect them, avoids failed payments, removes the hassle of putting things right and saves you money. Bank account validation quickly checks account accuracy against live banking data, catching incorrect account details before they derail your submissions. Learn more about bank account validation.

  • Secure file upload: Get maximum protect for your sensitive payment data with detect and encrypt functionality. When a file is detected, the system collects, encrypts and securely stores it. Learn more about secure file upload. 

 


 Why you should consider adding Bacs to your payroll service



Check out these great ways Bacs processing can enhance and grow your outsourced payroll business:

  • Process Bacs payroll payments on behalf of your clients, even if you’re not a Bacs Approved Bureau (BAB) 
  • If you are a BAB, avoid the complex hoop-jumping process of maintaining your BAB status 
  • Protect sensitive personal data by removing risk from file transfer to and from your clients or a third party Bureau if you’re processing clients’ payroll that way 
  • You don’t even need a direct SUN to be able to process Bacs submissions for your clients 
  • Deliver an added-value service to your clients creating customer ‘stickiness’ 
  • Unlock an additional revenue stream 
  • Create a competitive advantage over your competitors to boost your client lifetime value and grow your client base
 


Conclusion

Incorporating Bacs processing into your outsourced payroll system service can be a game-changer for your business.  Not only does it provide you with an additional revenue stream, it can help you deliver even greater value to your clients and boost client satisfaction.  Plus, it may provide a lucrative competitive edge against your competitors, helping you retain and grow your payroll client list.


If you’re an outsourced service provider, or running your own internal payroll function, and would like to know more about Bacs salary payments, get in touch with our friendly team. 



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