31 July 2013
Ireland struggles with SEPA
One third of Chief Financial Officers in Ireland is struggling with SEPA. That’s the outcome of a PwC survey in June 2013 with over 140 Irish CFOs. John Perry, the Irish Minister of Small Business, is also cautious about SEPA. He is quoted in the article “SMEs need to start SEPA preparations now” on the website Business & Leadership (Ireland’s leading resource for breaking business and management news) urging small and medium enterprises (SMEs) to start their SEPA preparations now.
The outcome of the survey is rather worrying. Nearly three quarters (70 per cent) of Irish CFOs expect to meet the SEPA deadline, but only half confirm that they have a strategy in place. That means that almost 30 per cent will not meet the end date. The survey also showed that 1 in 6 business leaders reported that they are either not confident of meeting the deadline or did not know if SEPA applied to their organisation.
The survey and the article both show that Ireland is not fully prepared yet for the introduction of SEPA on February 1st 2014.
With only six months to go, the lack of knowledge or preparation can lead to big difficulties when organisations migrate to SEPA. According to the survey, 44 per cent will not go live with SEPA payments before January 2014. That will result in a big pressure on resources (in-house and within the banking system) and there will not be enough time left to test if everything works fine.
In terms of the level of preparedness for SEPA, half (51%) of responding CFOs reported that they have a strategy in place; while a third (34%) said that they have either not yet developed a strategy or were unsure as to their level of preparedness.
“Companies should not only focus on their own readiness, but also understand their clients’ and suppliers’ readiness effort. If, in February 2014, companies discover that they are not ready, they may have difficulties paying invoices, which will impact on their relationships with key suppliers,” says Amy Ball, consulting senior manager PwC.
Ball continues: “At the same time, companies need to ensure their customers are SEPA compliant and will be capable of paying their invoices. The key concern is that the payment industry may be confronted with a backlog of issues that need fixing. We believe that all companies and stakeholders should have appropriate contingency plans in place.”
The Minister warns SMEs
The article on Business & Leadership contains the warning of John Perry, the Irish Minister of Small Business. According to Perry, SMEs need to start SEPA preparations now. He spoke following a presentation to the Advisory Group for Small Business on the implications for businesses if they are not SEPA compliant by February 2014.
“SEPA will make banking systems compatible. Once you make a payment in one of the participating 33 countries, it is guaranteed to arrive in the beneficiary’s account the next day. Some banks have introduced SEPA capability to their customers already in advance of the deadline of February 1st, 2014,” the Minister said. “The key benefits for businesses will be faster settlement and simplified processes that will help improve their cash flow and potentially help to reduce their costs.”