Tags
ADDACS, ARUCS, ARUDD, AUDDIS, AWACS, Bacs, Bacs Reports, DDICA, reports
Categories
Reports
Date
19, JUN 2017

We look at the BACS reports that you will need to become familiar with as a Service User – what they tell you and how to use them!

Once you have your direct debit – and, if appropriate, direct credit – systems in place, what next? There’s the addition of new customers signing up to pay by this method – known as Lodgement, and the regular submission of collections files and management of the Bacs payments cycle. Service Users must also stay on top of the reconciliation of direct debit customer payment and collection information such as missed payments, cancelled Direct Debit Instructions or wrongly applied direct debits or credits. To help Service Users keep on top of this, BACS produces a number of reports. In this blog, we look at those reports, what information they give you, and how to use them.

As a general point, BACS reports can be downloaded them from the payment services website, or obtain them through your Bacs software. BACS reports only highlight changes – so for example, the AUDDIS report which we look at first, won’t list valid Direct Debit Instructions which have been implemented, only those which could not be set up.

The AUDDIS Report

The Automated Direct Debit Instruction Service (usually referred to as AUDDIS publishes an Advice Of Bank Returned Direct Debit Instructions – or AUDDIS report which details those new Direct Debit Instructions which have been submitted by you for lodgement but have been rejected either by BACS or by the payer/customer’s bank. There could be a number of reasons for this, including the cancellation of the instruction or the bank account being closed. The reason will be indicated using a ‘reason code’ so it is clear what action needs to be taken. For example, if the DDI has been rejected because the bank account is an invalid account type (reason code F), you will need to get in touch with the customer and ask for the correct information.

The ARUDD Report

If a Direct Debit transaction cannot be completed, it will appear in an Automated Return of Direct Debit (ARUDD) report. As for AUDDIS reports, you will receive a reason code indicating why the payment could not be completed. Based on this, you will be able to take appropriate action. One point to note with ARUDD reports is the ‘Refer to Payer’ reason code. This means that the paying bank cannot advise of the reason the payment could not be completed. Refer to Payer can mean that there were insufficient funds in the relevant account, but this should not be assumed, and you will need to conduct further investigations.

The ADDACS report

Once a direct debit instruction has been set up, it may Change. The, ADDACS, the Automated Direct Debit Amendment And Cancellation Service creates an ADDACS report which advises a Service User of changes that are made to existing Direct Debit Instructions. These should be acted upon within 3 days of receipt. It’s in your best interests to act quickly on receipt of an ADDACS report from BACS, otherwise you risk making incorrect collections and facing indemnity claims, loss of revenue and damaging your reputation as a business.

The DDICA Report

The report that no Service User wants to receive, the Direct Debit Indemnity Claim Advice (DDICA) Report contains details of any Indemnity Claims you face – for example because you collected a payment early or in the wrong amount. Unless you have experience handling these claims, we would advise you to take advice from a specialist direct debit company.

The above BACS reports all refer to Direct Debits. For those also using Direct Credits, you should be aware of the following reports.

The ARUCS report

If the direct credit system has been unable to apply the payment concerned, funds will be returned to your bank account and you will receive an Automated Return of Unapplied Credit Service (ARUCS) report explaining that the payment has not been made and giving the reason why. This could be because the bank account could not be identified, or some other reason. As with ADDACS reports, it is vital to action an ARUCS report within 3 working days, advising the intended beneficiary that the payment has failed, and (if necessary) obtaining the correct details to ensure payment can be made.

The AWACS report

An AWACS (Advice of Wrong Account for Credit Service) report will contain information about payments that have been made even though the bank account details were inaccurate. You will receive the correct details and it is in your best interests to update your records swiftly to ensure that payments are not misdirected in future. In any event, you should action information in the AWACS report within 3 working days.

Once you get in to the routine of checking your BACS reports and actioning as necessary, it will become much clearer and more manageable. It is a good idea to make sure staff handling BACS reports receive regular training to stay on top of the reports and how to action them in different circumstances. Alternatively, you can work with a direct debit bureau which can scrutinise your reports and handle any actions arising.