Practically every major UK business worth its weight in salt uses BACS (which stands for Bankers' Automated Clearing System by the way), and is preparing to make the big switch to the new system known as BACSTEL-IP.

So 'why fix something that ain't broke' you may ask? Well, the new system should make life a lot easier for all concerned. In fact BACS argues that 'upgrade' is not an appropriate term for what is essentially a new system.

BACSTEL-IP runs using internet technology, but rest assured that the new system, which uses the latest PKI (public key infrastructure) technology, will be more secure than the previous incumbent.

Just as important is the improvement in reporting capabilities that BACSTEL-IP offers. Payment progress can be monitored online, at either submission or file level.

Meanwhile, confirmations are sent through to the user more quickly while transaction reports are delivered electronically - which should cut down on paper processes.

BACS has also been brave in setting its deadline for the switch. For organisations that haven't taken up the new system by December 2005, that's tough. The previous version of BACS will simply be switched off.

But there is a sting in the tail. Any business that deals with direct debits will have to make the switch much earlier than anyone else - by next March.

This will include all the big utility firms.

What must also be taken into account is the very finite number of software companies that are approved to make the switch. Some of these software providers, such as Albany, Bottomline and Eiger, do not want to find themselves battling to migrate thousands of businesses just days before both cutoff points.

One thing's for sure: a successful changeover will appear to Joe Public as if nothing has changed. But if it is unsuccessful everybody will know about it.