Companies put payments change on the BACS-burner
Only 1% of the companies that need to move to a new BACS clearing system have begun the work, provoking serious concerns over how many will meet the December 2005 deadline for the changeover.
Up to 40,000 companies have to move to the new BACS system – BACSTEL-IP – but it is feared very few companies have begun the preparations to meet next year’s cut-off date.
Adrian Stafford-Jones, founder and MD of BACS software provider Albany, said: ‘The reality is that not many companies have gone through with changing their software. Albany is looking at a big logistical challenge managing supply and demand. If everyone leaves it to the last minute it won’t get done.’
The change to BACS software has been made after high street banks expressed concerns about its ability to cope. BACS spokeswoman Anne-Marie Kesselman, said that 12 banks, including HSBC, Barclays and NatWest, now offer the new software. ‘The banks were concerned that the security BACS offers isn’t good enough to deal with the growing volume of payments,’ said Kesselman.
‘So we decided to re-engineer.’
BACS has billed the product as ‘more than an upgrade’, as it uses internet technology to improve security and payments can be made over the internet. The existing telecoms-based customer delivery channel will be replaced with the latest internet technologies.
Despite the costs incurred to comply with the new software, Kesselman said that businesses would benefit greatly from BACSTEL-IP. ‘It provides real-time payment information, and will require less man-hours to use.
Accountants will also be able to follow audit trails online as opposed to on paper,’ he said.
Stafford-Jones added that the cost involved in implementing the new solution depends on what a business requires from it.
‘Someone that currently uses BACS on a standalone PC could be charged £1,000, while larger businesses that use the software for various purposes could be charged tens of thousands.’