A Guide to SEPA Support Packages

Foto: iStockphoto
Photo: iStockphoto

The upcoming SEPA changeover takes place on February 1, 2014, and will affect all areas within an enterprise:

  • Sales and Purchasing have to inform customers and partners about the IBAN/BIC changeovers and modify existing contract templates (GTCs, etc.) in relation to the mandates.
  • Treasury and Cash Management departments will have to adapt account details and liquidity management.
  • Accounting will have to update master data for accounts receivable and payable as well as invoice templates in relation to IBAN/BIC and mandate data.
  • HR, legal, and marketing departments will face a substantial amount of work in the SEPA changeover. IT departments are required to adjust the payment and ERP systems in the enterprise to the new payment methods and, where necessary, roll out new software (e.g. for mandate management, payment systems). Payment systems will be necessary because while SAP generates the payment media including format creation, it no longer provides the subsequent transport to the bank. Instead, the local units in an enterprise use a bank’s e-banking systems or even fax.

But even with time running out, many enterprises have not yet started to adapt their systems. A survey at the EuroFinance conference in September 2012 showed that over three quarters of treasurers in German businesses are not sufficiently prepared for SEPA. This is also due to the great deal of time and effort involved – adding SEPA capability to an SAP system tends to require complicated, expensive configurations. Nonetheless, SAP does provide the tools for the SEPA changeover.

SAP’s support packages for SEPA

SAP supplies Enterprise Support Packages for all releases higher than R/3; Enhancement Packages are available for SAP ERP 6.0 (Release R/3 4.6C is not supported in relation to SEPA). The massive regulatory changeovers, which SAP users face in light of SEPA, can also be simplified within this context by outsourcing the payment processes to external platforms.

Next page: Enhancement packages cover 4 areas of adoption

Various SEPA migration measures are feasible depending on an enterprise’s IT architecture (SAP-centered, legacy or third-party systems), the release (ECC 5.0, SAP R/3, SPx, etc.) and the functional scenario. For example, if SAP In House Cash (IHC) is used as Payment Factory, the accounting is SAP-centered, and the system at the latest release level, it must be established how the businesses gain access to the mandate information at head office. This is because SAP IHC does not support the option of centralized mandate management.

Other questions arise from the use of heterogeneous accounting systems (SAP and non-SAP) and various release levels: Should the mandate management take place under SEPA within or outside of the SAP environment, should the payment transaction run centralized via the payment system, and must format settings be made in the systems?

Enhancement packages cover 4 areas

The Support Packages and Enhancement Packages from SAP relate to four areas:

  • Updating master data (IBAN/BIC)
  • Adapting data media for the new formats (SDD, SCT)
  • Activating mandate management and creating master data
  • Adapting bank statement processing

1)  Updating master data (IBAN/BIC)

The SWIFT code basically corresponds to the BIC. There is only one SWIFT code per bank key; SAP Note 1529550 must be followed if there are multiple SWIFT codes per bank routing number. Multiple options are opened up when storing the IBAN: either via the respective master data for accounts receivable, accounts payable, business partners, and house banks via the transaction FIBAN (centralized table of stored IBAN entries) or by means of mass update via FIBANMD. Since there are exceptions in the process, it is not always possible to generate the IBAN.

Next page: Enhancement packages for area 2

2)  Adapting data media for new formats (SDD, SCT)

There are various means of adapting the data media: importing the SEPA payment files in the SAP system and direct transfer of the files to the bank. Or the enterprise outsources SEPA file generation via B2B interfaces to a service provider or external software, which then generates EDI-compatible payment media. TIS GmbH has developed a cloud platform to this end. The SAP Payment Medium Workbench was devised for option 1. Since Release 4.6 it is being used to create payment media and is required to generate the SEPA formats. The Workbench replaces the classic format-specific RFFO reports. The XML-based ISO 20022 format is now being used to exchange data media. As part of the standard, SAP has aligned itself to the requirements of the EPC and therefore does not support any country-specific requirements. In practice the banks also often internally define the global format trees with different field assignments so that bank-specific attributes are required in certain cases. In SAP these formats and implementations are mainly covered through consulting notes.

SAP has been supporting the XML format trees in accordance with the Common Global Implementation (CGI) initiative with selected CGI banks since December 2012. The CGI aims to simplify the implementation of the ISO 20022 message standards for corporate customers and thus promote harmonization of the country-specific attributes.

To import the formats via the Workbench, the bank master data must be modified via FI12/FBZP.  The payment method must be adapted in relation to the SEPA format (“Payment method in the country”) and the company codes and bank determination likewise adapted. One alternative at this point is again to outsource SEPA file creation. Here the initial requirement is to modify the bank master data, before setting up the connectivity to the software by importing the authentications. The payment method is adapted in relation to IDOC and the usage of classic payment media programs is abandoned. Adaptation of the company codes and bank determination takes place along similar lines to option 1.

Next page: Enhancement packages for areas 3 and 4

Dipl.-Informatiker Erol Bozak, MBA, ist Mitgründer der TIS und als CTO verantwortlich für den Bereich Forschung und Entwicklung (Foto: Privat)
IT graduate Erol Bozak, MBA, is co-founder of TIS and responsible for Research & Development in his role as CTO. (Photo: Private)

3)  Activating mandate management

Mandate management under SAP is integrated in the modules FI-CA and FI-AR. There are in turn two options here. Either centralized in SAP; this requires explicit activation through customizing (in SPRO). UCIs and mandates must then be stored. In addition, mandate management can also be outsourced via BAPI interfaces to an external platform like TIS. Different BAPIs would then need to be set up in each case for FI-CA and FI-AR. The technical prerequisite for importing and processing the SEPA bank statements is SAP Note 1686264. SAP offers a series of new functions with EhP 6, including bank statement processing, automated import, and the option of post-processing.

4)  Adapting bank statement processing

Specially assigned SEPA project managers or heads of the Treasury department tend to be entrusted with preparations for the single euro payments area within the individual businesses. The executions demonstrate just how complex it may prove for them to adapt the ERP landscape to SEPA. These transactions can be simplified by using external SAP-integrated payment platforms, which at the same time deliver a better overview and control of liquidity items and cash flows.