Why you should link to a Bacs Approved Bureau

Do you have your own Service User Number and collect Direct Debits? If so, you will need to decide the best way to get your Direct Debit collection information to Bacs. You can choose either:

• Direct Submission to Bacs: This is where your organisation purchases Bacs approved software. You then send payment files and information to Bacs yourself, or
• Indirect Submission to Bacs: This is where you instruct a third party, called a Bacs approved bureau, to securely send the information to Bacs on your behalf.

Over half of all Service Users making Direct Debit submissions do so through a Bacs approved bureau. Even when organisations choose to submit directly via their own software there are good reasons to link to a bureau.

What is a Bacs approved bureau?

Bacs approved bureaux are organisations that take responsibility for submitting Bacs transactions on behalf of Service Users. Typically they will submit sign-up information (AUDDIS) and collection information to Bacs and retrieve Bacs reports.

A full list of Bacs approved bureaux is available on the Bacs website. Many operate as ‘internal’ bureaux, i.e. they centrally manage the administration of Direct Debits for a group of companies in the same legal entity; or as ‘payroll’ bureaux. A smaller number operate as ‘commercial’ bureaux where they manage the administration of Direct Debits for organisations of all sizes and types.

All bureaux must go through a rigorous approval process and regular re-approval to maintain their status as a Bacs bureau. Bacs will review their systems, processes, understanding of the scheme rules, IT set-up and contingency plans. This should give Service Users reassurance that the bureau is successfully operating to the standards required by Bacs and the Direct Debit scheme.

Reasons to use a bureau

There are many reasons why organisations choose to use a Bacs approved bureau. They include:

• Some organisations (such as SMEs with relatively low turnover or newly-established organisations) might be unable to fulfil all of the criteria to be able to make direct submissions themselves,
• If an organisation is making a small number of transactions each month it may not be financially viable to purchase and maintain software,
• Some organisations lack the administrative resource to manage submissions,
• Lack of inhouse experience. Collecting an organisations income can be a daunting challenge – especially if there is limited in-house knowledge. It’s a specialist task and requires some understanding to ensure compliance with Bacs scheme rules,
• A bureau will ensure that a dedicated support team of experienced and knowledgeable staff are available at all times,
• Peace of Mind: The bureau are responsible for ensuring a secure, resilient, backed-up process with segregated data and secure communications,
• Flexibility: so an organisation can scale its Direct Debit operations up or down as needed,
• Financially beneficial: It can reduce costs associated with purchasing software,
• Quick to set-up and run: It can be set up in as little as 24 hours and can save time by reducing the administration around making submissions and collecting reports,
• Removes software issues such as forced software installations and upgrades; migrations from legacy systems; on-going maintenance; forgotten passwords and failures. Also, no in-house software means that processes can operate without staff needing to access office premises,
• No need for Smartcards: Meaning no concerns regarding loss or damage to these,
• Mitigates personnel issues: e.g. that can arise when staff leave or are unexpectedly absent due to sickness.

These are just some of the reasons – there are others that apply even if an organisation chooses to submit directly via their own software.

Bacs recommend linking to a bureau

Bacs are keen for ALL Service Users to consider their contingency arrangements. This is to ensure that Direct Debit collections are unaffected in case of system errors. In particular Bacs are keen for Service Users to consider the impact of not being able to submit a file. There are potentially significant business implications e.g. for cashflow, when expected income is not received. Company image can be negatively effected. Likewise, the associated costs of rectifying such problems can be significant.

For Service Users using their own software, linking to a bureau for contingency reasons can ensure an alternative submission method that mitigates the risks of being unable to process.