Do you ever get frustrated with trying to make payments to your European associates? With the introduction of SEPA the process is about to create less stress and quicker success!
SEPA (Single Euro Payments Area) aims to create a single standardised payment system across Europe along with a series of common standards and rules. It will mean you can collect a direct debit or make a credit transfer on any euro account with SEPA.
Can you avoid conforming to SEPA?
SEPA is a mandatory EU Regulation so all businesses will have to conform to SEPA by the 1st February 2014.
Bank account numbers and sort codes will be a thing of the past and replaced with IBAN (International Banking Account Numbers) and BIC (Bank Identifier Codes) for all businesses in Europe. This is will enable businesses to make payments to 32 countries and will in turn facilitate trade and strengthens European competitiveness.
There are three payment instruments under SEPA, credit transfers, direct debits and debit cards. Since 2008 businesses have been phased into using Debit and Credit transfers. From the 1st February 2014, payroll and accounting functions (paying creditors and receiving payments) will also take place with SEPA.
How will SEPA benefit your business?
The benefits of SEPA include improved access to markets, reduced costs as you will have one account for all transactions throughout Europe, boosts working capital management and liquidity, greater availability of banks for performing banking transactions and faster settlements.
Is your business ready for SEPA?
To prepare for SEPA you must first outline how SEPA will affect your internal systems and processes. Businesses may need to modify their information systems to gain the full benefits of SEPA.
In order to generate an IBAN and BIC you must contact your bank and software provider. They will be able to advise you further on the actions needed for you business.