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If you’re banking on receiving Direct Debit payments from customers in time for Christmas or New Year, you might be in for a shock this year.
With the festive holidays falling on consecutive weekends, the Bank Holiday rollovers are set to cause some delays and disruption.
Interbacs has all the key dates from the Bacs calendar 2021 to prepare you.
How long do Direct Debits take to clear?
Direct Debits take three working days to clear through the Bacs payment system. On day one, a payment file is submitted to Bacs.
On day two, the bank processes this file and on day three, the Bacs payment is credited, with the funds normally arriving in the recipient’s bank account by 7am on the third day.
It’s the ‘working days’ part of this process that makes all the difference to when you receive your funds.
Do Direct Debits come out on a Bank Holiday?
This is where things get slightly complicated. The short answer is: ‘no’. Direct Debits don’t come out on a Bank Holiday (or on weekends), only on working days.
If you normally debit customers on a certain date and that falls on a Bank Holiday or weekend, the funds will be taken the next working day.
Read our latest blog on whether direct debits come out on bank holidays and keep up to date with your payment schedules. Where this gets even more complicated is in and around Christmas and New Year, depending on where the public holidays land.
How will Christmas and New Year affect Direct Debits this year?
This year is one of those where the timing of Christmas and New Year’s Day fall awkwardly. Both occur on a Saturday.
That means with Christmas Day and Boxing Day spread over a weekend the Christmas Bank Holiday and Boxing Day Bank Holiday move to the following Monday and Tuesday (27-28 December).
Then, with New Year’s Day unfolding on the weekend, the New Year’s Day Bank Holiday will be on Monday 3 January.
Great news if you’re looking forward to a few extra days of family time and indulgence, but bad news if you’re waiting on Direct Debit funds.
With that in mind, we thought it would be useful to highlight some key dates for you to bear in mind in the run up to the festive period.
Forewarned is forearmed, as they say. With a clear idea of important dates on the remaining Bacs calendar 2021, you’ll be better placed to plan appropriately.
Key dates on the Bacs calendar 2021
For our managed Bacs Bureau clients, the latest submission date for a Direct Debit collection on Christmas Eve will be Wednesday 22 December.
Just a day later and the money will not be collected until Wednesday 29 December, due to those Christmas Bank Holidays.
For funds to be collected on New Year’s Eve, the latest submission date is 29 December. Otherwise, the money will be collected in early January.
Unfortunately for our Facilities Management clients the knock-on delays are more pronounced. Due to the fact that Bacs credits our holding account first, there will potentially be a longer gap between when your customers are debited and when you receive your payment report.
There will then be a bigger gap between the date you receive the report and when you eventually receive the money in your account.
To put that into context, if your customers were debited on Wednesday 22 December, the cleared funds report wouldn’t be uploaded until Wednesday 29 December, with your money credited on New Year’s Eve.
One day later and your money won’t be credited until Tuesday 4 January. If the money was debited on New Year’s Eve, you’d receive your report on Thursday 6 January and the funds on Monday 10 January.
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