Crunch time for BACS users

UK businesses have just weeks to plan their switch to the new online BACS system, or risk entering 2006 paying suppliers or staff wages manually, the IT industry has warned.

Concerned software vendors have revealed that they would struggle to deal with a huge influx of businesses preparing to switch nearer the 31 December, 2005 deadline, when the old BACS system is switched off and replaced by its new internet version BACSTEL-IP.

A survey by BACS vendor Bottomline has revealed that only one in four businesses with a turnover of £20m and more has begun or completed their migration to the new system.

‘While the switch-off to BACSTEL-IP is still achievable in theory by the end of the year, good intentions now need to be matched by concrete action and commitment,’ said Peter Fortune, president of Bottomline Technologies Europe.

Ian Armstrong, head of BACTSEL-IP migration at Bottomline, warned that high-profile businesses could end up making out cheques to staff and suppliers ‘if inertia in the marketplace’ continues for the next few months.

Matthew Croxford, product manager at Eiger, said there was still adequate time for businesses to switch, but certain vertical sectors, such as manufacturing, were further behind than others. ‘Industries such as manufacturing and pharmaceuticals don’t deal with customers via direct debits, so have been slower to plan migrations.’

Trafford Centre finance manager Gavin Macdowell, who planned the centre’s migration to BACSTEL-IP, urged other businesses to plan for the switch as soon as possible: ‘We jumped quickly because I can see companies screaming for help in September/October this year, and not being able to make the switch. We went early to avoid any bottleneck.’

Accountis MD Rhys Jones said that the 31 December deadline was a ‘very real one’, as BACS had stuck to earlier deadlines relating to the BACSTEL-IP migration. On 31 March BACS switched off its X.400 messaging system, which provided details of direct-debit payments.

‘The fact that X.400 has been switched off shows these deadlines are real,’ Jones said.

Last November, BACS claimed that 20% of the 35,000 businesses using BACS had migrated to the new online system. BACSTEL-IP marketing manager Mike Hutchinson warned that businesses can’t wait until the summer to plan the switch. ‘If they stick their hands up in August for help to migrate, it’ll be too late.’

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