By February 1st 2014, all qualifying organisations must comply with the SEPA framework. Many businesses are yet to make the required changes to their financial processes missing out on opportunities such as; increased payment speed, improved cash flow efficiency
and ensuring a healthy relationship with stakeholders in the financial process.
The SEPA initiative ultimately creates an area which all electronic payments conducted in Euros are treated with domestic, common conditions. As a result it removes the barriers existing around national and international, domestic and cross border payments.
Experian estimates there’s 3 billion records in payment databases in the SEPA-zone whilst €34 billion transactions are made every year within the Eurozone related to salary, supplier, collection and other business payments.
Businesses without a headquarters in the Eurozone should also take note and will need to guarantee SEPA compliance too if regularly dealing with Euro currencies.
Unification of the way a business intiates and receive payments is key to SEPA compliance. The requirement is for businesses to convert the bank account data held in domestic or BBAN format to the IBAN format. Analysis highlighted when converting existing
data requirements to the SEPA format approximately one in eight entries are incorrect, in some territories that ratio lifted to two in five. The cost of repairing a single direct debit fault is £35, when you multiply this by the high proportion of errors it
offers a significant cost saving opportunity for businesses.
Currently many legacy systems are unable to adopt the SEPA changes and if it’s possible then often the cost of maintenance for these systems which is already high increases with each year, this is due to deteriorating maintainability of these systems - therefore
businesses should look to external tools to transform the data.
Businesses need a solution that is allied with current systems, consistent and reduces the risk of human error - automation seeks to provide such consistency.
Clean data is held in high regard surrounding SEPA legislation, ensuring IBAN and BIC codes are correct guarantees timely payment and prevents incurred costs. Automation solutions layer themselves onto an existing direct debit processes, unifying the way
in which data is processed with continuity and guaranteeing the integrity of data.
Human error further threatens the cleanliness of data, human processing sees a significantly high rate of error in comparison with automation which improves the ability to comply and enables cost saving.
Is your business close to becoming SEPA compliant? The deadline is looming and many companies still have much to do. Yet, many businesses lack the urgency you would expect to see, move fast and you’ll reap the benefits. Automation saves businesses money
whilst enabling a step away from everyday all-consuming tasks, allowing the workforce to focus on finding innovative solutions to broader business challenges – the cornerstone for businesses.