By Robert Sinfield (pictured, right), Product Marketing Manager for Epicor Software
What can you do to get ready?
You need not despair though. Even though SEPA might differ slightly from country-to-country you can use one bank account to make and receive any and all payments in Euros from a single bank account.
As your organization prepares for the move to SEPA, Epicor has identified the following major changes your ERP system must support in order to become ready.
· Implementing SEPA is a big change for your organization so create a project for the introduction of SEPA with a clearly defined ﬁnancial budget. Know what your goals are and put things into different phases if necessary.
· It might sound logical but remember to appoint a project manager who coordinates the activities related to the introduction of SEPA.
· Remember to draft and implement an action plan for the introduction of SEPA, and determine a date when your company wants to actively switch to SEPA.
Managing your finances:
· What is your company’s policy around banking? Will you have one bank for all companies or multiple banks? What does this mean in terms of bank charges and standardisation?
· Determine whether opportunities arise for your company because of SEPA (new markets).
· Make sure to check all your banks are SEPA-compliant, don’t assume anything!
· SEPA allows you to use one EUR bank account for all payments and receipts in Euros. Is one bank account in EUR sufﬁcient (are more local bank accounts needed)?
· Do you use a cash pool and does this cash pool structure need to be adjusted?
· Make an inventory of the documents/procedures used that will be affected by the change to SEPA:
o How do you manage mandate administration?
o Structure contracts, subscription forms, etc. containing account numbers and/or client approval for direct debits.
· Remember to update your invoices with your International Bank Account Number(IBAN) and Bank Identifier Code (BIC):
o Identify when to start to obtain the new SEPA-compliant mandates.
o Identify the changes of the information in receiving Credit Transfers and processing Direct Debits.
· Train your (back-ofﬁce) employees in dealing with the new direct debit procedure.
· Is it necessary to inform your customers about the change to SEPA direct debit (i.e. general conditions, additional mailing regarding the changes)?
· In which way will the new refund period (six weeks) impact your current credit management?
· What is the impact for your liquidity management as a result of the SEPA payment cycles?
· Are there opportunities to centralize the group’s credit management and/or payment and collections processing?
· Are there opportunities to rationalize the group’s credit management by means of electronic bill presentment combined to your payment & collections?
· Will you continue to use MT-940 or other mechanisms to gather electronic bank statements, or will you switch to the SEPA equivalent (CAMT)?
Managing payments and receipts:
· Where are your customers/suppliers located? Make a list of the customers that are in ‘SEPA countries’ and adjust your plan to support the introduction of SEPA in these different countries.
· Which payment methods do they use (transfer, direct debit, check, cash, etc.)?
· Can these payments be switched to SEPA direct debits/payments?
· What is the chance your supplier will force you to switch to direct debit?
· What is the impact of changing to the SEPA scheme for direct debits/credit transfers?
· You need to ensure all customers’ and suppliers’ bank account numbers are entered into your ERP according to the IBAN formats. Start collecting IBAN and BIC of your customers ASAP.
· What is the impact of changing to the SEPA scheme for credit transfers?
· Start providing your customers with your IBAN and BIC ASAP.
· Be prepared for incoming ﬂows by means of SEPA credit transfers if you are not already supporting this.
· Make an inventory of all software and ﬁles where the name of the bank (BIC) and account number (IBAN) are mentioned.
· Determine whether (customized) ﬁnancial software is used and contact the provider.
· Determine whether the changes in the software are part of the subscription fee.
· In case you should buy new software, keep in mind SEPA’s requirements.
· Determine when your software has to be SEPA proof.
· Determine the consequences for the interface between ERP and electronic banking software (new XML-format related data for direct debits /credit transfer).
· Make a planning for the adjustment of the software.
· Test the adjusted system(s) amply before the date of switch.
· Does the software support dual formats (i.e. SEPA / non-SEPA per country involved) in the transition period?
· Start collecting IBAN and BIC from your staff, amply before ﬁrst salary payments in SEPA are made.
· Check the capabilities of the software in which staff is administered.
· Determine the date you start paying salary payments in SEPA.
· Place SEPA (on a regular basis) on the agenda of your internal meetings.
· Provide (senior) management with relevant information.
SEPA does not need to be complex. The latest next-generation ERP and financial software platforms offer organizations a flexible framework that harnesses the power of integration and process technology to adapt. Standard SEPA XML schemas can be adopted and easily adjusted to meet local, regional or even bank specific requirements. So don’t panic, your organization can quickly become ready for SEPA!