The Bankers’ Automated Clearing Service, commonly referred to as BACS, is a payment system used to process bank-to-bank payments electronically in the UK. Since the 1960s, the BACS payment process has been the backbone of UK business payments. Even after the introduction of multiple payment options, the BACS transfer process remains reliable, cost-effective, and sustainable for large volumes.

Many businesses still follow the conventional approach of inputting BACS payment details manually from their ERP system into their banking software. However, this can lead to errors and incorrect or missed payments.

But did you know that exporting BACS payments with Microsoft Dynamics 365 Business Central can be done using predefined templates that are compatible with the most common UK-based banks?

Read this step-by-step guide to understand how you can use Business Central to easily and conveniently export your BACS payment processing details to a format that your banking software can understand.

How the BACS Payment Process Works

The BACS payment process is popular with both businesses and individuals for processing paychecks, settling bills and invoices, and direct debits. Although the BACS payment processing doesn’t take place in real-time, you can settle the payments over a three-day cycle: Submission on Day 1, processing on Day 2, and funds arriving on Day 3.

Even with faster payment processing systems on the rise, you can still maintain BACS as a central part of your payment operations without switching completely. The incredibly supportive features of Microsoft Dynamics 365 Business Central can help you do just that.

Prerequisites Needed

  • Access to Dynamics 365 Business Central
  • Role as Finance Manager or similar with permissions
  • Basic understanding of payment journals
  • Access to bank-specific BACS file format or schema

Steps to Follow to Export Your BACS Payments

Before you begin BACS payment exports, you need to make sure the data has been appropriately mapped in the system. You can reach out to us if you need assistance with this step.

Following this, you can begin with the process to export your BACS payment details:

Step 1: Navigate to the Payment Journal

Go to the relevant payment journal in Business Central where your payment entries are recorded.

Step 2: Select Payments

Choose the payments you want to export for BACS processing.

Step 3: Use Export Function

Look for an export function or action button that allows you to export payment data. This might be labelled as ‘Export’, ‘BACS Export’, or something similar.

Step 4: Export File

Confirm the export to generate the BACS file. You’ll typically be able to download this file to your computer.

Step 5: Upload to Bank

Log in to your bank’s online portal and upload the BACS file for processing.

And it really is as simple as that! If you’re interested in having this function set up for your business, contact us today to discuss your personal requirements.

It’s important to note that the exact steps may vary depending on your version of Business Central and any customisations that have been applied. Remember, exporting financial data is a sensitive operation, so ensure you follow your organisation’s security protocols and double-check all details before uploading the file to your bank.

Troubleshooting Guide

Use this troubleshooting checklist to identify and resolve common issues you may face with exporting BACS payment details in Business Central.

Common Issues

  • The file is not recognised by the bank
  • Missing Header/Footer rows: Often caused by misconfigured XMLPorts or DED
  • XMLPort or Codeunit not triggering
  • Errors like “There is insufficient memory”
  • The output shows incorrect characters or encodings
  • Wrong/missing file name in RTC: Verify the file name usage or apply relevant patches

Resolutions

  • Configure all three segments (header, detail, footer) correctly
  • Make sure to match exact bank formatting specs (some need padding or fixed lengths). Some banks like HSBC, JP Morgan require specific fixed-width file formats. We recommend that you get their format specs and match them with the DED/XMLPort.
  • Confirm XMLPort is set up for export, not import
  • Check user role permissions or try using the SUPER role
  • For memory errors, review the recursive logic or streamline the Data Exchange setup

Reach Out to Us for Help When

You’ve:

  • Tried exporting, and the file fails at the bank
  • Can’t get the XMLPort to work correctly
  • Are unsure how to comply with the bank format

Our team can help you with:

  • Customising the BACS file tailored to your business
  • XMLPort development
  • Dynamics 365 Business Central training on payment processing

Reach Out to Brookland Solutions for Quick BACS Setup

Brookland Solutions is a long-standing, certified partner for Microsoft Dynamics 365 Business Central. We have helped scores of businesses across multiple sectors, including manufacturing, food and beverage, property management, service management, arts and entertainment, and wholesale and distribution, with implementation, customisation, support, extensions, and upgrades to their Business Central subscription.

When it comes to handling business payments, entering and exporting BACS payment details is an important step in managing the BACS payment process effectively. This also makes it a part of your business’s broader strategy to stay competitive and compliant. In case these steps don’t give you the desired results when setting up a BACS export using Business Central’s Data Exchange Framework, we’re always here to help.

If you’d like to discuss more about setting up BACs exports in your Business Central or about making the move across to BC, reach out today to Brookland Solutions for a no-obligation discussion. Get in touch or book a demo to learn more about our services!