This is largely a rant as I am the one that sorts the unreconcilable banking stuff on our system - mostly passing it on to the accounts department. But ultimately I am the only one with access to the actual bank - the company is small enough that it makes sense to work that way. So when things appear on the daily statement that cannot be automatically processed, I have to decide what to do.
Some days, rarely, there is nothing to check, but most days there is something, and it is almost always customers being a tad annoying.
We mostly collect payment by Direct Debit, which "just works" - however we allow payment by bank transfer at no extra cost (though some packages are DD only). Basically, some people do not trust Direct Debit, and I know why. We don't trust it - or to be more accurate we don't trust all of our suppliers to actually do Direct Debit in accordance with the rules. It is a sad state of affairs as the rules are actually very clear and simple, and allow claw-back if not followed. When we do Direct Debit we make damn sure we are following the rules. However, if someone wants to pay us by bank transfer they can. I really do understand. We have many people doing that correctly and on time.
The only stipulation we have is that they complete the correct beneficiary reference on the payment. Well, of course, they also have to do the right sort code and account number, but the reference is for our benefit. It is to allow us to assign the payment correctly.
I had one today and it wound me up - hence the post. The customer pays quarterly and uses normal 2 day BACS transfers, and normally pays on time.
They never send the right reference, in fact they send "0". We do not get sender sort code and account from our bank, so we have to make some guess and generally I have to make the assignment of their payment manually. We charge £5 for doing so - it is manual work we should not have to do.
So is it unfair that we insist on the correct reference on the payment?
I really do not think so - at the end of the day that is why the reference exists, and there are so many organisations you have to pay that also insist on the correct reference: Gas, Electric, Water, Telephone, Rates, VAT, PAYE, and many more. Companies have to have a way to send payments with the right beneficiary reference else they have some serious problems paying the most basic things like VAT and Rates. We are no different.
The one today was extra special. It was a company that usually pays on time but never uses the right reference. As such we charge £5, but to make it easy we include that as a line item in the next bill and not a separate invoice. If we made it a separate invoice you have an infinite loop of paying that without the correct reference and again being invoiced. We saw that happen once when we made it a separate invoice - very sad - we did not have the heart to keep it going and so changed the system.
But occasionally this organisation also pays late and so gets a late payment invoice (typically £40) and then a separate invoice when they pay, for the interest. In this case it was for 3p. This is all according to statute for late payment of commercial debts. If you don't like it, pay on time, duh!
What was especially sad is they sent a BACS payment for the 3p. BACS works for 1p to £10million. They did not send £40.03 to cover both invoices, but just 3p, leaving the £40 overdue. They will end up with a £5 charge on the next invoice for paying 3p without a reference - a £5 charge for my time and the accounts team's time handling the payment with not reference (bargain). They probably pay bank charges to send the 3p that is a lot more than 3p!
It is sad that large company bureaucracy can end up like this - just paying - not even complaining - paying for their own failings time and time again.
I think the £5 charge is fair. I dislike having to faff around every day (even when on the North Sea) to do bank reconciliation, and then paying accounts staff as well. It costs money and is avoidable - just use the right reference. It is even the same every time (the A...A account number) but we are flexible and can handle the I...A invoice number if preferred. This is not a way for us to make extra money at the expense of companies that are inept, honest.
Even so, this is verging on a stupidity tax, and so it is scary...
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banking systems that do not quote sort code and account number are pretty annoying - it's like receiving an email without a reply address and it also means that if you need to do a refund you have to faff about phoning the bankReplyDelete
I think your system currently looks for "accountnum" or "invoicenum" whereas it would be better to look for "*accountnum* OR *invoicenum*". If one quotes the account number and the invoice number or adds anything else into the ref field then your system does not understand and applies the £5 charge even though all the correct information was present.ReplyDelete
We specify that it should be account number (A...A) but will accept an invoice number instead (I...A) and will ignore extra text so you can do account number and a space and some other text if you wish. We try not to be too strict. However, the "correct" information is just exactly the account number (A...A) as specified on the invoice and statement. If you have an example of a case where someone was charged when the account number was present I am happy to take a look and try and understand why.Delete
Agree the 5GBP charge is fair - we do something similar for people who (still) insist on paying by cheque or cash.ReplyDelete
On the subject of references, unfortunately many banks don't make it easy for the payer, especially if supplier has a uniqie reference number per invoice. HSBC online banking, as an example, creates a separate payee for every different reference you use, so the payee screen can very quickly become cluttered with duplicate payees with outdated references.
Banks which allow a 'default' reference, but that can be changed on each payment made, would be much better.
We expect the account number as reference which is same for every payment on that account - which should help in such cases. The problem customers are generally the ones that have some BACS system, rather than those just using an on-line banking web interface.Delete
I don't think any customer who's aware of the consequences of not filling in the reference correctly (the CEO of the company manually assigning their payment, while on holiday) could object to the fiver. It's priced so that most sane people would just pay it, learn the lesson and move on. If the charge was £100, it might be a different story.ReplyDelete
Your account looks like it is with Barclays. Ask them about DirectData+ as that does include the sending sortcode and account number; or at least it does in my feed.ReplyDelete
Have you asked the customer why they are unable to complete the reference number correctly?ReplyDelete
We do that, we try and resolve the issue, honest.Delete
If someone is happy (as they clearly are) to pay you a £5 fine every time - even for 3p - then just take the money.ReplyDelete
Your issue is the time its taking YOU to deal with this & I suggest that's what you should address.
If accounts don't have access to at least a daily bank statement (with references) then can I suggest you work out a method whereby this happens?
You shouldn't be reconciling client/bank accounts if you have an accounts dept. By all means keep the bank login details to yourself but why have an accounts dept if you end up doing the donkeywork? Surely you give them updated bank statements & they sort out who the hell the people are? They can then give you a daily summary & you do anything required on the banking side, which is hopefully minimal.
Its not a good (or valid) use of your time IMHO. Someone in accounts can do it faster than you & its what you pay them for anyway.
It is a combination of my checking it first and passing most to accounts, yes. We used to be a tad more slick but Barclays on-line banking went a bit wonky.Delete
This is classic small->medium business growth problems.Delete
You're not an accountant Adrian. The time you take to identify shit like this is best spent otherwise - unless of course you consider your accounts team as inadequate.
Do what you're good at & let others do the job you pay them for. They are better at it than you because its their sole function in your company.
Would you consider offering a five pound credit where clerical errors at A&A cause customers to incur additional book-keeping costs?ReplyDelete
We have that in our terms for things like DD collected in error, but would consider it for other cases.Delete
I operate the IT side of a music school that my sister runs. The majority of payments are made by BACS and we ask for their family reference number followed by surname and show exactly what they should use very clearly on every statement. Of around 150 families at least 20% make a relatively trivial error such as omitting the leading letter 'F' (to distinguish family ref from pupil ref) or the hyphen that separates number from check digits, or give a different surname (families are very complex nowadays). Those are matched automatically anyway subject to a quick visual check. Another 20% put the surname first or make up their own reference like child's forename or instrument but get the family number in somewhere so we're at least able to match it manually and it's unique so we can create a mapping rule for future payments. And then we come to the last 10% who put a reference for their own benefit such as 'MUSIC AUTUMN TERM" or "VIOLA LESSON".ReplyDelete
The unmatchable or hard-to-match ones we send chasing letters to and put the onus on them to prove that they paid in order to demonstrate to them the difficulty they cause by not following a simple instruction. Usually works ... eventually.
I reckon that since most utilities are DD now people have forgotten how important it is to get the reference right.
I remember the other end of this process causing grief at work a few years ago: we had both line and broadband with BT, so received two bills each month. At least once, the MD paid the broadband bill, but with the landline account number as reference - so the following cycle, one bill was in credit, the other had a penalty for late payment, in addition to a non-DD surcharge (£9 per month as I recall, or maybe £9 per quarter?). Why a single piece of copper, for use by a single customer, ordered with a single phone call and delivered by a single engineer visit, required two different account numbers ...ReplyDelete
The MD wouldn't trust BT with DD access (perhaps understandable; the following year, they managed to cut the line off by mistake, taking weeks to restore service!) - though the line and broadband are covered by a single annual DD payment (to IDnet) now, which works much more efficiently.
I would suggest simply sending it back with the reference "WE DO NOT ACCEPT BACS TRANSFERS WITHOUT A REFERENCE YOUR BILL IS UNPAID", but that would probably be too long...ReplyDelete
As we don't see originator bank details, we can't.Delete
Based on JJ's comments why not simply dump all those without the correct reference in to a holding account and no more? Your systems will then kick in for non-payment and they'll have to do all the work for you to prove when they paid.ReplyDelete
Charging people a small extra fee is not much of a deterrent. Causing someone at their end a lot of extra work is more likely to make them mend their ways.