SEPA is coming – Your checklist for SEPA migration

– written by Daniel Ruth, Consultant at itelligence –

SEPA (Single Euro Payments Area) is currently a hot topic, or is it? If you believe them, current studies indicate that for example barely 10% of German companies are actually ready for SEPA. And time is running out: By 01 February 2014, SEPA will become mandatory! From this date onwards, only the new SEPA payment methods will be supported.


The migration to SEPA should not be underestimated, though. SEPA is neither only a software issue, nor does it affect only the area of financial accounting. SEPA will impact many company areas and requires not only the adaptation and optimization of processes but also monitoring and control of own master data as well as communication with banks and private business partners.

But what exactly must be done? What should you do? And what is done by others?

Here at itelligence, we try to answer these questions with the aid of our SEPA Checklist. The list addresses relevant issues and is aimed to provide “food for thought”. There are multiple valid answers for each question, and a variety of measures could be derived from such answers. Our checklist has been used to coach a variety of customer workshops and has been continuously expanded and optimized.

In the coming weeks I will present – in several blog posts – some aspects of this checklist and will address some of the individual issues in more detail. It is intended to shed light on the questions behind the obvious and to present measures we could derive from this exercise.

Here we go!

Our SEPA checklist is divided into three areas. For starters, we should clarify some fundamental questions about the impact of SEPA on your company.

What are the payment methods I use and which require the conversion to SEPA?

SEPA enables the use of credit transfers and direct debits. Now, the first thing to do is to identify and define – for each affiliated company – which payment method to be used in future and which methods are already in use (and must thereby be replaced, either in part or completely). SEPA transfers allow, among other things, both domestic and international bank transfers within Europe. This includes transfers to the United Kingdom or Switzerland. However, SEPA is only available for payments in Euros. Therefore, a foreign money transfer, such as a transfer in Swiss Francs, requires still a foreign bank transfer.

In which countries do I plan to use SEPA?

Or, in other words: Which banks I want to use for SEPA transfers? SEPA is a standardized payment area, which is also standardized in its technical aspects. Nevertheless, when implementing SEPA, for each country there are specific circumstances to be considered, checked and mapped. Group companies operating in SEPA countries must be included in the SEPA implementation right from the beginning.

Is my enterprise software compatible with SEPA?

If we look at any SAP ERP, the answer is quite simple: SAP is fully compatible with SEPA. Even older versions have usually no problems with SEPA. As a requisite, there must be fairly current support packages in place. In addition to the ERP system, other software must be looked into as well. Is standalone bank software in use? Is there a Web Store? Maybe a Supplier Portal? Or Employee Portal? What system is used for Human Resources Management?

All of these areas may be affected by SEPA and need to be tested for potential implications. Well, you still should be able to pay salaries and wages in February, right?

What about my master data? Are they compatible with SEPA? What should I be aware of and what’s to maintain?

As usual: Reliable master data are the be-all and end-all! With the introduction of SEPA, IBAN and BIC are now important. A payment using account number and sort code is no longer possible.

This means, that for all active business partners, IBAN and BIC codes must be added to the existing bank details, if necessary. In addition to manual methods of maintenance, IBAN switching processes are available, which may be used for batch processing as well.

But in addition to the maintenance of existing business partners, it is also important to have a closer look at existing business processes. How can it be ensured that IBAN codes are maintained for new partners as well? Do I have to add IBAN and BIC codes to new customer forms, which are used by my marketing and sales department? What about my Supplier Portal? Or employee forms for new hires?

We discuss these areas in more detail in the next blog. We will also have a closer look into the possibilities for IBAN batch maintenance. In addition, there are exciting things such as SEPA mandates or pre-notification. And a closer look at SAP can never hurt …

Any questions? You can ask me questions via the comment function of this blog – I look forward to your feedback!

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