The deadline is approaching for businesses to ensure their existing financial systems are SEPA compliant. Yet research, such as the one conducted by The Financial Services Club in May, revealed that 79 per cent of the 420 businesses surveyed admitted they were unprepared or unaware of the SEPA legislation deadline of 1st February 2014, with 57 per cent still at the planning stage. With the clock ticking ahead of next year’s deadline they are not on their own.
Almost unanimously (98 per cent) stated in the same survey that they see other business challenges, such as mobile commerce (m-commerce), to be a higher priority. The answer is not to keep sweeping SEPA under the carpet though. By taking action to ensure your software is fully SEPA compliant is an investment that can start paying immediate dividends for businesses who take the right approach.
SEPA (single euro payments area) is a payment integration initiative of the EU which aims to simplify bank transfer transactions and improve business performance.
It is essential businesses ensure their systems are SEPA compliant, not only because of the imminent deadline, but also to take advantage of the potential efficiency savings this legislation provides which include:
- Simplified payment processes
- Faster settlements
- Improved cash flow
- Potential reduction in costs.
Despite some popular misconceptions, SEPA is not just an IT or finance department issue. Failure to comply could be felt throughout an entire company, from customer service and support through to sales. If that scenario concerns you it’s a good indication that you can no longer afford to wait to migrate your existing system.
Jonathan Williams, director of strategic development at Experian, suggests that it can take several months for some organisations to fully migrate and understand the complexity of SEPA, with regards to data validation and generating the formats required for SEPA payments.
The good news is that help is available to businesses, should they need it. However, according to the aforementioned survey from The Financial Services Club, only a quarter of businesses within the Eurozone have considered enlisting the support of external software providers. For Williams, this is a statistic which needs to change if businesses are to ‘optimise use of the time left and resources available to hit the (SEPA) deadline’,
Leading software providers specialise in providing robust and integrated finance systems that are not only SEPA compliant, but also provide businesses with significant efficiency and productivity savings. By automating manual and error-prone manual tasks these innovative solutions eliminate payment inaccuracies and speed-up management reporting, making migration to SEPA much more seamless.
There is no financial or legal penalty for failing to migrate to SEPA. However, with EU regulation requiring that current payment systems be switched off before the deadline, those not using SEPA will risk being unable to make or collect payments, or face delays in transactions whilst enduring significant processing costs.
Businesses who continue to overlook the benefits of SEPA compliant business software may find that their out-of-date systems will be responsible for an unacceptable number of errors, resulting in delayed and rejected payments, costing companies up to 50 euros for each failed transaction.
SEPA should no longer be the elephant in the room. Instead it should be viewed as an opportunity for businesses to avoid unnecessary costs, improve cash management and increase productivity, now more than ever.