SEPA [Single European Payment Area] – what is it?
SEPA is a European Regulation that is intended to simplify processing payment and receipt transactions across all 32 EU member states. It affects both banks and their clients. Banks need to be able to accept debit and credit transactions in SEPA formatted files, and their clients need to be able to produce SEPA files. Its coming up hot and heavy with the compliance date for SEPA I [there’s always a phase II to these things!!] set for February 1 2014. SEPA I is concerned with transacting in Euro across the EU. SEPA II is concerned with transacting in any currency across the EU.
Grand. But how will it affect us?
All that follows is a brain dump of things we have encountered helping Dynamics GP users in Europe become SEPA compliant. The real big issue is for clients who collect customer payments. Under SEPA the responsibility for maintaining Direct Debit Mandates switches from the Bank to the client. So if today you collect payments by DD – you will need to implement a Mandate process. All banks require to see the confirmation letter you send to new customers. Easiest is to ask them for a copy of their recommended letter and modify it for your needs. Each mandate is required to have a Unique Mandate Reference in order to allow direct debits to be refunded / queried.
So, that said – how does SEPA affect your business? First, contact your bank and see are they SEPA compliant…or when they plan to be. Until they are ready you won’t be able to send a test file [generally…however some may accept files depending on how far down the road they are with their side]. Most of the main Irish banks are SEPA compliant at this stage or will be very soon. We’ve seen some differences in how they interpret the various nodes in the SEPA XML schemas- its supposed to be standardised, right? – well it is up to a point apparently. So don’t take it for granted that a file that works with one bank will work with all.
Some banks are offering a service to clients where existing EFT formatted Credit files will be converted to SEPA by the bank…so clients in theory don’t need to worry about re-configuring their outputs. But there are end dates on these services…and they are not offered for Debit transactions. Additionally, previously there was some elbow room when it came to submitting flat files – not now – the banks have tightened up on the flat file specs if you want to use their conversion process. In all cases so far we have had to edit the existing exports for GP users who have chosen to use this interim bank service.
Some things to watch out for:
There are disallowed characters in SEPA that were allowed in flat files. Get a list of these and make sure you either remove them from such things as Vendor Name, or you engage a utility to remove / convert them prior to producing your SEPA file. Also, in the past DD files survived muster with really any Payment Type ID. Under SEPA these rules are rigidly enforced – so make sure your output uses the correct code.
What are your options in Dynamics GP?
Realistically, you have two: 1. Create an XML EFT output using the XML File types in standard Dynamics GP EFT Module…get your partner to become authorised by the bank…and submit you and your partner to endless testing. 2. Engage the services of an expert in the field that specialises in maintaining all of the file standard outputs including SEPA. Make sure they are authorised by your bank as a supplier. Continue with your current GP process and just modify the output to be an upload to this specialist partners software.
Having reviewed all of the possibilities, our advice is option 2 and we are encouraging all our Dynamics GP clients towards this. Its far more economical [annual usage fees are as low as Euro 250.00] and you’re always up to date…and when SEPA II kicks in, it will be just a matter of applying an update. Anyone who is facing SEPA issues in Europe feel free to reach out to me.