The Single Euro Payments Area (SEPA) is now in operation. Frances Maguire compiles a SEPA checklist for corporates, regardless of whether they have migrated nor not.

Although SEPA went live on 28 January 2008, with the launch of the SEPA Credit Transfer (SCT), it is not mandatory for corporates, or banks, to switch to the new instrument immediately. Likewise, when the SEPA Direct Debit (SDD) is launched, expected in 2009, both the SEPA payment instruments will co-exist with national payment instruments during the transition period.
The initial target date for the withdrawal of national payment products from use was December 2010. However, as the full-scale of the SEPA migration was realised, it became clear that this deadline was unrealistic. No countries have outlined firm plans for phase-out of legacy products, although some continue to target 2010/2011. These dates and deadlines should become clearer over the next 9-12 months as countries move towards phasing out these services.
Regardless of when they decide to migrate to the new SEPA instruments, there are some requirements that companies need to consider and respond to.

►    All banks have not yet fully migrated to SEPA and may be re-routing SCTs during the transition period. Companies should challenge their banks on how they are migrating payment operations to SEPA as they should be eliminating the need for companies to change connectivity, security and file formats, and minimising the impact of change.
►    There is no mandated pricing for SEPA - banks are free to price their own services. There is, however, an expectation that SEPA prices will not exceed domestic prices in order to accelerate migration to SEPA.
►    All companies still need to be able to accept incoming SEPA payments, and should check if the additional payment information from a SCT on their bank statements impacts their accounts receivable processes. 
►    Companies should continue to collect BICs and IBANs, a pre-requisite for processing their new SEPA instruments, from their suppliers, for accounts payable.
►    Likewise, the accounts receivable team should be collecting BICs and IBANs from customers who pay by direct debit, for the soon to be launched SEPA Direct Debit.
►    There is no facility for payment by cheque in the SEPA environment and cheques must be phased out.
Then there are certain actions companies can take now to begin benefiting from SEPA:
►    All companies should have appointed someone within the organisation to keep abreast with SEPA developments and how the changes will affect the company. 
►    Analyse and understand all current euro transactions and re-think liquidity management solutions in the light of SEPA. Regardless of whether there is a shared service centre or centralised treasury operation in place, all companies can now operate a single euro position.
►    Now that the term “cross-border” no longer exists in the single payments zone of the euro, companies can now bring these payments into their domestic payments processes and stop using costly same-day funds transfer for non-urgent cross-border payments. Using SCTs instead will immediately reduce banking charges.
►    As it is no longer necessary to have a bank account in each euro country to make payments companies can close accounts in low volume countries and make those payments from an account another country.
SEPA is here and here to stay, and the most important cost saving a company can make is to integrate migration to the SEPA instruments into any future upgrades to their ERP platforms. This will dramatically reduce, if not eliminate, the cost of implementing the changes.
 For companies who have done this and have begun using the SCT, there are certain things to look out for:
►    SEPA was designed for an environment where national practices cease to exist, but central bank reporting will not disappear immediately. This must be considered before moving certain payments to SEPA, and is particularly important before embarking on any rationalisation of account structures. The banking industry continues to lobby national and EU bodies to resolve this issue. 
►    SCTs operate under a 'maximum' cycle time of three days. This will be reduced to D+1 by 2009. Until then SCTs may not be suitable for time critical payments, such as a salaries. 
►    Although the SCT will only support transactions denominated in euro, banks in any of the 31 SEPA countries (of which only 15 currently use the euro as their national currency) can offer the service to their clients.
►    Ensure banks are not focusing too much on becoming SEPA-compliant, to the detriment of other cash management services.