Traditionally, the door to Direct Debit was closed for accepting regular payments for things such as nursery and school fees.
With insufficient turnover to meet the banks’ strict criteria, small business managers and headteachers had no choice but to rely on less efficient methods such as cheques, cash and Standing Orders.
But with the advent of Direct Debit bureaux and their expertise with Bacs transfer times, it’s now possible – and remarkably easy – to cast aside these outdated ways of collecting cash.
A bureau such as FastPay can take care of everything, leaving you to concentrate on your staff, pupils and demanding workload.
But how can parents make a bank transfer using Bacs? Here we’ll explain the ins and outs of accepting fees via the most secure, reliable and flexible system available.
Read on to learn about Direct Debit timings and how you can be up and running within just 24 hours.
Step One: Understanding Bacs and Bureaux
Bacs is the body which oversees and operates all Direct Debit schemes.
A bureau is a company which directly submits payment instructions to Bacs on behalf of its clients.
Over half of the organisations using the Bacs clearing service make their payment submissions via an approved bureau rather than submitting directly to Bacs via their bank. They offer an alternative to the costly and stringent process of managing a scheme with your bank: one that requires high turnover and involves many administrative hurdles.
Each bureau has to be vetted by Bacs to join the scheme and authorised by a sponsoring bank. They can then process Direct Debits for you, while adhering to the Bacs transfer times, allowing you to hand over the day-to-day management of regular payments to the experts.
A Direct Debit bureau usually offers two separate schemes: a bureau service for corporate businesses with their own service user number from a bank (read more about SUNs below), and a facilities management (FM) service for SMEs, charities and organisations who can’t get their own SUN.
The timeline for Bacs transfer times differs slightly depending on which service you use.
With both, you’ll find using Direct Debit to collect school and nursery fees a time-effective, cost-effective and simple solution for your business.
Step Two: Get Your Unique SUN
A service user number (SUN) is a unique code given to every organisation which collects money via Direct Debit. They’re used by Bacs as a form of ID to record all corresponding transactions. They’re also used by banks to look up the name of each company so they can be included on the payers’ bank statements.
When you sign up to FastPay’s Managed Service, they’ll give you a SUN which will allow you to start collecting payments from your clients straightaway. FastPay use unique SUNs for each Managed Service client, meaning that your establishment’s name and logo, rather than the impersonal name of your bureau, will appear on all documents.
If you’re a larger business and have the necessary turnover, usually at least £1m, you can obtain a SUN from your bank and sign up as a bureau client. To get one of these, your company must prove its management expertise, financial health and contractual capacity.
Your bank will then link your SUN to your bureau’s number in order to process payments.
Step Three: Collect Direct Debit Instructions
The next stage of making a bank transfer using Bacs is to collect Direct Debit Instructions (DDIs) from each of your clients and forward them to your bureau.
A DDI provides all the information required to accurately process payments and authorises you to debit their account, provided you give advance notice.
They can be completed either online, over the phone or on a paper mandate. If you’d like guidance on what details you need to collect, FastPay can supply branded Bacs-approved web forms, phone scripts and paper mandates to make the job even easier.
Once you have their account details, the amounts you wish to debit and the nominated collection date, we can set the wheels in motions.
Your pupils’ parents will soon be enjoying the peace of mind, flexibility and convenience that Direct Debit brings: a welcome helping hand for busy mums and dads.
Step Four: Data Submission
Your bureau has an expert understanding of Direct Debit timings and will manage the submission of all the necessary data to Bacs on your behalf.
If you use the Managed Service, FastPay will create and submit each payment file for you. If you use the Bureau Service, FastPay will submit the payment files you’ve created in-house. You’ll be charged a small fee per collection, with a volume discount triggered when applicable.
Once Bacs has been instructed to process them on your preferred date, your customers’ accounts will then be debited and you can be reassured that money is on its way.
Step Five: Receive the Money
For Managed Service clients, the amount will be credited to a Client Trust Account held in your name by your bureau. Once these funds have cleared, which usually takes around three days, the money will be transferred into your account.
For Bureau Service clients, Bacs will directly transfer the money from your customer’s bank account into your business account on the same day.
You’ll be kept up-to-date with the entire process through daily, automated reports sent direct to your inbox. You’ll know that fees have been successfully paid and also be quickly alerted to any issues such as failed, bounced or cancelled payments.
Armed with accurate information, you’ll be able to take swift, professional action to resolve problems, boosting your customer service and cashflow.
Step Six: Grow Your Business
Once you’ve checked your account and see a healthy balance, you can use the time you would have spent chasing payments to focus on growing your business.
Instead of making awkward phone calls, completing endless spreadsheets and re-calculating cashflow forecasts, you can engage with staff, parents and pupils, improving service and planning for the future.
Now you have an understanding of Direct Debit timings and Bacs transfer times, you can look forward to the many benefits that switching to Direct Debit will bring: streamlined banking through integrated technology, predictable cashflow, improved customer satisfaction and reduced admin time.
With a new payment system in place, your nursery or school’s future will flourish alongside your pupils.