New IDoc Helps with Looming SEPA Deadline

  • by Juergen Weiss, SEPA-Now Consulting
  • June 11, 2012
Become familiar with the structure and application of the recently introduced Intermediate Document (IDoc) type PEXR2003. Understand why SAP developed this IDoc type and how you can use it for your SAP In-House Cash (SAP IHC) implementation.
Key Concept

SAP In-House Cash allows corporate cash and treasury management departments to set up a payment factory and to centralize their payment flows. The business concept of SAP In-House Cash becomes increasingly important with the introduction of the Single Euro Payments Area (SEPA). The new regulation allows companies to get rid of expensive, difficult-to-manage incoming payment accounts at foreign correspondence banks. It can be expected that more companies will set up payment factories and shared service centers for financial operations to centralize their financial accounting, cash, and treasury management functions. While SAP In-House Cash was ideally positioned to meet these objectives, the component didn’t really support SEPA because the payment formats generated by SAP In-House Cash were lacking essential payment format details that are mandatory for processing the new SEPA payment instruments (namely the SEPA credit transfer and the SEPA direct debit). The new IDoc type PEXR2003 will close some of these functional gaps.

In February and March 2012 the European Parliament and the Council of the European Union passed regulation 260/2012, establishing a deadline for the introduction of the Single Euro Payments Area (SEPA). SEPA applies to all national and cross-border Euro payments within and between the 32 member states of the European Union (EU), the three European Economic Area countries, and Switzerland.

 

The new regulation calls for the introduction of the new SEPA payment instruments by February 2014 (SEPA credit transfers) and November 2014 (SEPA direct debit). These payment instruments will gradually replace the currently existing domestic payment types such as DTAUS in Germany.

 

The imminent SEPA introduction was one of the main reasons that SAP introduced the new IDoc type PEXR2003. SAP users that have implemented SAP In-House Cash weren’t able to transmit the necessary SEPA information in the existing PEXR2002 IDoc format. SEPA credit transfer and direct debit payments need to contain a number of attributes to be accepted by a corporation’s house bank. Some of the most important attributes are:

  • The mandate identification code
  • The sequential type of the mandate (recurring or one-time debit)
  • The mandate type (B2B or B2C)
  • The creditor identifier

 

Without these attributes a bank in the SEPA zone wouldn’t be able to process a payment instruction. Besides SAP In-House Cash customers there is another use case for this new IDoc type. Some SAP users are directly exchanging IDocs with their house banks and would prefer to continue to use this service once SEPA is introduced.

 

Juergen Weiss

Juergen Weiss works in the functional area of SAP Financial Supply Chain Management. As part of SAP’s product management team, he was globally responsible for the Financial Supply Chain Management applications, including Electronic Bill Presentment and Payment, Dispute Management, Collections Management, Credit Management, Treasury and Risk Management, Bank Relationship Management, and In-House Cash as well as Accounts Payable and Receivable.

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