35,000 Businesses To Regret Turning Their BACS

Recruitment agencies using the BACS system to make electronic payments are being warned that if they do not act now they will face a Christmas crisis.



All agencies who use BACS to make payments to suppliers, employees or providers, must migrate to a new online system, ëBACSTEL-IPí, by the end of December 2005. BACSTEL-IP is an online version of BACS which makes transactions more secure, faster, and is easier to use than the current system.

However, according to payroll specialists, PAYEpeople, the migration process takes time and agencies must act now to meet the deadline, or face being shut down when the old system is switched off.

The change affects businesses who submit payroll direct to BACS (i.e. not through a Bureau), and payroll bureaux and affect most recruitment companies, since the majority now use BACS. PAYEpeople was one of the first to migrate to the new system, however claims others seem to be burying their heads in the sand.

Andrew McNicholas, PAYEpeople head, explains: ìAs a payroll bureau, weíre committed to providing a faster and more secure service to our clients. I find it surprising that there are so many businesses that havenít even taken the first step to migrate.î

Of the 65,000 users that have already migrated, 87% would recommend BACSTEL-IP to other companies over the old BACS system[1] The alternative to BACS will be to go back to using cash or cheques.

Spokesperson for BACSTEL-IP, Mike Hutchinson, has issued a warning to those leaving it until October or November:

ìThe migration process includes the installation of new software. There are a limited amount of suppliers for this, and there will be a bottleneck effect if everyone leaves it until the last minute. Companies need to register by September, in order to migrate inside the December deadline, or face having their payroll shut-down at Christmas.î

One reason which businesses could be stalling is the fact that the migration costs between 6,000-12,000. Andrew adds: ìThis will hit smaller businesses in the pocket, and weíve had a number of SMEs approaching us to outsource their payroll.î

As a member of the EKW Group, PAYEpeople offers a specialist payroll and advice service to businesses looking to have the headache taken away from them. Its key client base remains SMEs, where the burden on time and investment in this area is at its greatest.

For information about migrating to BACSTEL-IP visit the website www.bacstel-ip.com. Alternatively, for advice on outsourcing your payroll, contact PAYEpeople on tel: 01942 816 512.