Why Planning your Bacs Submissions Over Easter is so Important!

Every year we see news stories about organisations that have collected Direct Debits early – or late. Often a “Processing Error” is blamed for errors in Bacs Submissions. If your organisation wants to avoid the negative impact of such errors – which can create an administrative burden to rectify, lead to unhappy customers and damage to company image – it’s important to plan your Bacs submissions.  This is especially important over holiday periods like Easter when errors can be more common.

Common errors during holiday periods like Easter

Typically errors can occur when staff responsible for Bacs processing take planned holiday. They might submit files early before their holiday starts (files can be submitted up to 30 calendar days in advance of the processing date). They may pass the responsibility for managing the collection to other, less experienced staff while they are away. Errors also occur over holiday periods because of the increased number of bank holidays which impact when files need to be sent to Bacs.  If staff are unaware of the Bacs processing schedule or submission software is not configured to read a date from a file, it is possible for files to be processed earlier – or later – than intended.

Collecting Direct Debits early or late can cause Issues

Direct Debits should never be collected early. The Service Users Guide and Rules to the Direct Debit Scheme state:

Rule: “Direct Debits cannot be collected before the date specifically detailed on the advance notice. This applies whether or not the specified date is a working day”

If Direct Debits are collected early, the possible consequences can be significant for both the payer and the collecting organisation. These can include:

• Insufficient funds in the payers account – leading to failed collections
• Payers having additional bank charges e.g. for their accounts going overdrawn which the Service User has a responsibility to cover
• Unhappy customers – leading to complaints
• Extra admin tasks for the collecting organisation e.g. to deal with customer support queries
• Additional finance burdens for the collecting organisation – e.g. regarding the repayment to customers of incorrect collections or charges (which could impact cashflow); and reconciliation of the failed items.

Collecting Direct Debits later than advised can also create challenges for both the payer and the collecting organisation. For the payer for example, they may no longer have sufficient funds if the due date has passed. For the collecting organisation for example, a delay in obtaining income could lead to cashflow issues.

Errors can occur for organisations large and small

In January 2024 we saw East Devon Council apologising for collecting Direct Debits early over the Christmas holiday period: https://eastdevon.gov.uk/news/2023/12/council-apologises-for-error-with-council-tax-direct-debit-payments/.

Unfortunately they were not alone. Last January we saw similar apologies from Milton Keynes Council: https://www.milton-keynes.gov.uk/news/2022/milton-keynes-city-council-direct-debits-apology and from Exeter City Council to name but two others: https://www.itv.com/news/westcountry/2023-01-16/council-apologises-after-taking-direct-debit-payments-early.

And it’s not just Councils of course, plenty of large and small commercial organisations have had to issue apologies for incorrect Direct Debit collections. Three mobile for example had to apologise in April 2019 for collecting Direct Debits early: https://www.moneysavingexpert.com/news/2019/04/three-mobile-admits-taking-direct-debits-early/. You only have to search online for “Direct Debits taken early” to see other examples.

Bacs Submissions over Easter

Easter is a time when Bacs processing is affected by the increased number of bank holidays. When the banks are closed, Bacs are not open to receive files. With Good Friday and Easter Monday bank holidays to account for, it’s important to be aware of when files should be sent to Bacs.  To help you plan your Bacs processing, please see the table below:

5 Top Tips to help prevent errors with Bacs Submissions over Easter

1. Plan your Bacs submissions carefully (You can download the Bacs Processing Calendar to help).
2. Ensure software is configured to read a date within the file – this way, if files are submitted early the collection can be future-dated.
3. Ensure staff are trained and aware of Bacs Cycles and Processing timelines. (You can read more about the Bacs cycle in our Blog)
4. Consider a 2 person approval process or submission check via Payment Services Website. This will both prevent errors and ensure early identification of errors if they do occur (it’s always easier to deal with errors on Submission day as you have more options available)
5. Keep your data as clean and up-to-date as possible by actioning your Bacs reports.

Still Got Questions?

If you are unsure about Easter processing, the Bacs cycle or have any other questions, please Contact Us – we are very happy to help!