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Snow Joke: Your 'Emergency Payments Process'

Published on Friday, February 13, 2009

If the first 5 weeks of 2009 are anything to go by, we are all set for a testing year of climatic challenges - both economic and elemental.

During these times, it is important to have in place efficient contingencies to ensure that your business survives unscathed.

As was widely documented by the media after the freak snow showers that befell the country this week, the cost incurred by British businesses forced to close last Monday through a lack of staff was approximately £1.5 billion, but this figure doesn't begin to reflect the bigger picture.

Imagine, for a second, that the weather hit the country one week earlier; the week that the vast majority of businesses would most likely process their payroll and supplier payments for the month.

The worst case scenario in this eventuality? The entire business is paid late and all suppliers are made to wait until normal service is resumed, disrupting the workforce and straining strategic relationships.

The Problems:
In the event that the primary Bacs payments facility is inaccessible, most companies' contingency systems would consist of either cheque or CHAPS-based payments. Both of these alternatives would achieve the desired result, but at a cost:

• Writing 200 cheques would take approximately 2-3 hours
• Making 200 CHAPS payments would cost roughly £6000 - an unnecessary and crippling expenditure to incur.

In order to execute these plans, we also have to assume the member of staff can gain access to the office in the first place.

The Answers:
Recent technological developments now enable businesses to cover themselves in the event of such abnormal and unexpected conditions:

• The Faster Payments Service
  Although Direct Corporate Access (DCA) is not expected until later this year, the CHAPS alternative has proved a massive success in the personal banking arena, with £26 billion already processed through the system. Costs for the Faster Payments Service will vary as banks begin to find their feet and develop their own policies, but are expected to be a fraction of CHAPS fees.
• A Wide Area Network (WAN) Payments Solution
  Enabling secure concurrent usage across multiple sites, a Bacs payments solution, such as Albany ePAY, can be deployed and will enable businesses to make payments from different locations.

It is encouraging to know that no matter how erratic the weather, or how severely the credit crunch strengthens its grip, there are cost effective and accessible contingencies available for businesses of all sizes and types.