Creating BACS Transactions

BACS is a simple, secure and reliable service which enables organisations of all sizes to make payments by electronic transfer directly into a bank or building society account. Increasingly, large suppliers are moving schools towards BACS for receiving payment of goods. RM Finance Online supports the creation of BACS files to facilitate electronic payment of suppliers. This article describes the procedure for creating BACS payments, either as a non-order expenditure or through the entry of a commitment.

Readers of this article should already be familiar with the setup and configuration steps required for BACS functionality, covered separately in 'Setting up BACS' help page. It is assumed that these steps have been conducted before proceeding with a BACS payment.

The ability to post a BACS payment is available through all transaction entry screens and each will be covered in detail in the sections to follow. The transaction options available are summarised as follows:

• Expenditure (Single and Multi-Line Entry)
• Credit Note (Single and Multi-Line Entry)
• Purchase Order (Full and Express) 

Once a payment has been posted, the article then describes the process to generate the BACS export file and also the associated remittance, whether that be a printed copy or an email attachment.

On occasions users will have the need to correct BACS payments and focus is given to the recommended steps for reversing and re-entering postings. 

Raising a BACS payment (expenditure transaction)

The expenditure entry screen is located via Transactions > Expenditure.

It is assumed that the supplier account has already been configured for BACS payments (i.e. bank account name, sort code, account number, email syntax and preferred payment method - BACS and/or cheque).

When selecting a supplier for the BACS payment, the preferred payment method will be displayed by default.

Selecting an alternative payment method can be achieved using the drop-down field. A supplier record can specify up to three possible payment options, as follows:

• BACS Payment - used to generate a BACS payment
• Create Cheque - used to generate a pre-printed cheque and remittance
• None - used for other types of payment (e.g. handwritten cheques)

Where a supplier accepts payment by both cheque and BACS, the default option will be governed by the status of the tick box 'Make BACS the preferred payment method', which is activated/de-activated via System > Organisation Details > LEA details and BACS settings > Payment settings.

All other entry fields are standard to an expenditure transaction type.

Click OK to display the fund nominated as the BACS bank account. Where no fund has been nominated for BACS (System > Bank Details > Edit) the transaction cannot be posted.

Click OK to post the BACS payment ready for export.

Raising a BACS payment (purchase orders)

A new purchase order (or express order) can be entered via Transactions > Expenditure > New Order (or Express Order) in the usual way i.e. the process is unaffected by the extended BACS functionality.

Once the order has been received in part or in full (via Transactions > Amend/Process) it is then ready for payment. Click on Pay to update the paid quantity/value and then again on the subsequent Pay button to post the payment.

As with expenditure transactions, the default payment type - BACS Payment, Create Cheque or None - will be displayed, based on the supplier record nominations. This can be amended using the drop-down list.

Note: As the bank account is chosen during initial entry of the commitment, the BACS Payment option will only be displayed if the BACS bank was selected. It is possible to adjust the specified bank via the main Amend/Process Purchase Order screen, if required.

Click OK to post the BACS payment ready for export.

Raising a BACS payment where the supplier and bank account name are not the same

There maybe instances where the account name registered on a supplier's bank account may differ from the supplier name registered within RM Finance. This can cause issues when creating a BACS export file.

The BACS export file will use the supplier name and not the bank account name registered on the BACS tab of the supplier record. Therefore, there is potential that when these two differ, the BACS export could be rejected when uploaded to your bank for payment.

We have devised a workaround to use in these instances. In this example, the supplier name is RM Education PLC.

The bank account name is Reseach Machines

To ensure that Research Machines is the name pulled through to the BACS export file and not RM Education PLC, you must set up Research Machines as an alternative payee.

Please follow the steps below:

1. On the supplier record, click Edit then clcik on the magnifying glass next the the Alternative payee field.

2. Click on Create new code.

3. Enter the details that relate to the bank account name, in this example - Research Machines.

4. Ensure that you update the BACS tab with the Sort Code, Account Number and Bank Account name.

5. Click Save on the Create Alternative Payee screen.

6. Click Save on the Supplier record.

Ensure that when creating a new expenditure transaction for the supplier that you select Yes from the Use alt. payee drop down menu to ensure that the correct bank account name is pulled through on the BACS export file.
You will get a warning where the Alternative payee has not been selected for the supplier.