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SEPA Series Part 3: SEPA and Cash Application

Which adjustments are necessary to achieve high assignment rates under SEPA

SEPA migration in the area of cash application should be performed step by step. In a first phase, technical SEPA compliance needs to be ensured. For this, adjust your existing selection criteria (main rules) and search patterns (sub rules) in order to make sure that the automatic posting rate while still using the bank statement formats MT940 / DTI.

In a second phase, you can look at CAMT bank statement formats (053 / 054). Here you require a detailed analysis of the corresponding formats and contents for each house bank. Only after evaluating the results of the analysis you should decide whether and when to migrate to CAMT for each bank. In order to ensure a high automatic posting rate here as well, you need to check the different elements (selection criteria, search pattern, etc.) and adjust them in relation to CAMT formats. As there are currently no regulatory standards for the use of CAMT formats, you should perform the step by step migration only after analysing all facts.

SEPA payments are indicated by sender/recipient information IBAN + BIC. As long as you still use the 'old' bank statement formats MT940 and DTAUS, this information is partly written in the note to payee (DTAUS) as this format does not have fields for such information. In order to not interpret this additional reference information incorrectly, you have to analyse and adapt existing posting rules and search functions in the cash application software you use accordingly.

In addition, new business transaction codes were defined for the different SEPA payments. This means you have to update your selection criteria in order to ensure that a correct assignment of bank statement items to posting rules is performed.

New return reasons will also be used with SEPA. You need to ensure that the processing systems can interpret them and consider them when posting. The forwarding of new return reasons for subsequent processes also needs to be ensured.

The details of how posting rules are used today and their selection criteria have to be adjusted should be analysed and evaluated for each company.

Our FinanceSuite AutoBank Automatic Cash Application is well suited to meet the SEPA challenges and allows the flexible adjustment of posting rules. Please do not hesitate to contact us, if you require assistance for this and/or the migration of other areas that are affected by SEPA. We will be glad to provide the advice and support you need.