AX 2009 SEPA (ISO 20022 XML) Credit transfer and direct ... · SEPA (ISO 20022 XML) Credit transfer...

AX 2009 SEPA (ISO 20022 XML)

Credit transfer and direct debit payments Date: 16. September 2014

Contents

Introduction ................................................................................................................... 2

Setup Credit Transfer ..................................................................................................... 3

Setup Company information ....................................................................................... 3

Setup Country/region to work with SEPA .......................................................................................... 3

Setup a bank account for the legal entity (CEE) ................................................................................ 4

Setup a Method of payment for SEPA credit transfer .......................................................................... 5

Set up vendors and vendor bank accounts for SEPA credit transfers .................................................... 7

Create and export payments using SEPA payment format .................................................................. 9

Setup SEPA Direct Debit ............................................................................................... 13

Setup company information .......................................................................................................... 13

Setup Country/region to work with SEPA ........................................................................................ 13

Setup a bank account for the legal entity (CEE) .............................................................................. 14

Setup SEPA Direct mandates ........................................................................................................ 15

Setup Number sequences.......................................................................................................... 15

Setup Accounts receivable parameters ....................................................................................... 17

Setup a Method of payment for SEPA direct debit ............................................................................ 19

Setup customer record including direct debit mandate and customer bank account ............................. 22

CORE/COR1 vs. B2B .................................................................................................................... 26

Differences between SEPA Core and B2B Schemes ....................................................................... 27

Create a free text invoice for direct debit mandate customer ............................................................ 28

Create the payment and generate a SEPA direct debit file ................................................................ 30

Additional information .................................................................................................. 34

Releases for SEPA Credit Transfer and SEPA Direct Debit ................................................................. 34

References ................................................................................................................................. 35

Validation tools ........................................................................................................................... 35



Introduction

The Single Euro Payments Area (SEPA) is an initiative by the European Commission in which all electronic payments are considered domestic, regardless of the country/region where the individual, business, or organization, and the bank are located. Within this area, there is no difference between national and cross-border payments. The SEPA includes the 27 European Union (EU) member states, plus Iceland, Liechtenstein, Norway, Switzerland, and Monaco. The SEPA helps form a single market for payment transactions within the European Economic Area (EEA). Ultimately, the SEPA is expected to reduce the number of payment formats that banks,

businesses, and individuals must work with. The European Commission established the legal foundation for SEPA payments through the Payment Services Directive (PSD). The European Payments Council (EPC) supports the SEPA by:

• Setting standards for SEPA electronic payments by using the ISO 20022 Universal financial industry message scheme XML format.

• Setting rules and guidelines for handling euro payments.

The EPC, which consists of European banks, develops the commercial and technical frameworks for the SEPA payment instruments. The EPC is committed to delivering three pan-European payment instruments:

• For credit transfers – SCT – SEPA Credit Transfer – supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2.

• For direct debits – SDD – SEPA Direct Debit – supported in Microsoft Dynamics AX 2009 SP1, Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2.

• For cards – SEPA Cards Framework – is not supported by Microsoft Dynamics AX



Setup Credit Transfer The following steps are needed to setup SEPA credit transfer. This documentation is based on

Contoso Demo data (CEE) with a legal entity located in Germany and KB 2902097 implemented.

Setup Company information 1. Go to Basic>Setup>Company information

2. Go to FastTab General

3. Select Country/region: DE

4. Select State: BE

Setup Country/region to work with SEPA 1. Go to Basic>Setup> Addresses> Country/region


3. Check Country/region type: Domestic



4. Check if the ISO code: DE is added


6. Add Currency: EUR

7. Mark checkbox European economic area

8. Check for all other EU member states vendors are needed for that country/region type: EU

9. Check if ISO codes are added

10. Add Currency=EUR


Setup a bank account for the legal entity (CEE) 1. Go to Bank>Common forms/Bank account details

2. Create a bank account used for SEPA Credit transfer payments (EURBANK)

3. Go to FastTab General and enter SWIFT code and IBAN

SWIFT: SSKMDEMMXXX

IBAN: DE12500105170648489890



4. Go to FastTab Address

5. Enter country/region: DE

Setup a Method of payment for SEPA credit transfer 1. Go to Accounts payable>Setup>Payments>Method of payments

2. Ctrl+N to create a new Method of payment: e.g. SEPA DE

3. Go to FastTab General and enter:

Payment type: Electronic Payment

Period: Invoice

Account type: Bank

Payment account: EURBANK



4. Go to FastTab File formats

5. Click button Setup

6. To use the file format for Germany select SEPA ISO20022 CredTrans DE

pain.001.002.03 (all format with a pain added are the latest valid pain formats)

7. Select SEPA ISO20022 CredTrans DE pain.001.002.03 for the field Export format



Set up vendors and vendor bank accounts for SEPA credit transfers 1. Go to Accounts payable>Common forms>Vendor Details

2. Select a vendor that should be submitted SEPA credit transfer for or create a new one e.g.

SEPA Vendor NL with Group: 10 and Currency: EUR

3. Go to FastTab Addresses and add country/region: NL

4. Check that within the Country/region setup (Basic>Setup>Addresses>Country/region)

European economic area is marked fot the used country/region

5. Go to FastTab Payment

6. Enter Method of payment: SEPA DE

7. Go to field Bank account

8. Create a Bank account for the vendor (e.g. NL BANK)

9. Within FastTab General enter SWIFT code and IBAN

SWIFT code: ABNANL2A

IBAN: NL18ABNA0484869868



Save


11. Add country/region: NL

12. Select the created bank account for field bank account within the vendor payment FastTab



Create and export payments using SEPA payment format 1. Go to Accounts payable/Journals/Payment/Payment journal

2. Ctrl+N to create a new journal and click Lines

3. Enter necessary data

Date: 2/19/2014

Account: 1004 (SEPA Vendor NL)

Debit: 1.000,00

Offset account type: Bank

Offset account: EURBANK

Payment status: set to None

Method of payment: SEPA DE



4. Go to Functions>Generate payments

5. Within the Generate payments form mark Export format

6. Export format=Select SEPA ISO20022 CredTrans DE pain.001.002.03

7. Select the legal entities bank account used for SEPA payments (EURBANK)

8. Enable Show format dialog checkbox

Click ok



9. Within the Dialog form fill all necessary values

Remittance Information: Unstructured

Processing date: 2/19/2014

Batch booking: No

Variant: 003 (if generated for Germany only)

File name: Select a place and a file name where the SEPA file should be stored

If a control report, attending note or payment advice should be printed mark the fields

Note: Information if Structured/Unstructured

Structured:

Belgium - Structured remittance information is based on the Invoice field for the settled

invoice. The first 10 numeric characters are used, plus a check sum based on MODULO 97. For

example, if the invoice is A1234B567C89012, the first 10 numeric characters are

12345567890. ROUND (1234567890/97) = 12727504 12727504 * 97 = 1234567888

1234567890 - 1234567888 = 02 Structured message: 1234567890 + 02 = 123456789002

Finland - For structured remittance information:

For Finnish vendors, the Finnish reference number information is used (Payment ID field

on the Payment tab in the Journal voucher form for the payment journal).

For foreign vendors, the vendor’s invoice number is used (Invoice field in the Journal

voucher form for the invoice). For the Message and Payment identification fields in the

payment file, the journal number of the vendor payment journal is used.

Unstructured:

Austria, France, Germany, Italy, Spain and Netherlands

Note:

Batch booking true/false

Batch booking tag is needed by the bank, which is processing the SEPA XML file.

If batch booking = true, the bank will summarize all the transaction into one sum, which is

displayed on the bank account statement.

If batch booking = false, all transactions will be displayed within single lines, as they are

displayed in the xml file.

Variant

Variant 003 is used in Germany ONLY, in all other countries the variant 002 is used, as well this field can remain empty.



10. Click OK to create the payment file

11. Go to the folder where the SEPA files should be stored



Setup SEPA Direct Debit The following steps are needed to setup SEPA direct debit. This documentation is based on

Contoso Demo data (CEE) with a legal entity located in Germany and KB 2902097 implemented.

Setup company information 1. Go to Basic>Setup>Company information



4. Select State: BE

Setup Country/region to work with SEPA 1. Go to Basic>Setup> Addresses> Country/region


3. Check Country/region type: Domestic



4. Check if the ISO code: DE is added


6. Add Currency: EUR


8. Check for all other EU member states vendors are needed for that country/region type: EU

9. Check if ISO codes are added

10. Add Currency=EUR


Setup a bank account for the legal entity (CEE) 1. Go to Bank>Common forms/Bank account details

2. Create a bank account used for SEPA Credit transfer payments (EURBANK)

3. Go to FastTab General and enter SWIFT code and IBAN

SWIFT: SSKMDEMMXXX

IBAN: DE12500105170648489890



4. Go to FastTab Setup and enter a Direct Debit ID: e.g. SEPA DD TEST


6. Enter country/region: DE

Setup SEPA Direct mandates

Setup Number sequences

1. Go to Basic>Setup>Number sequences>Number sequences

2. Click Ctrl+N to create a new number sequence

3. Enter Number sequence code: e.g. SEPA DD and Name: SEPA DD




Smallest: 1

Largest: 999999

Format: SDD-######

- There are two options for part Setup how the number sequence should be created.

Select Manual to allow to use manual Mandate IDs or Continuous



Setup Accounts receivable parameters

1. Go to Accounts receivable>Setup>Parameters

2. Select FastTab Direct Debit

3. Enter required days



Note (depending on the bank and country):

Pre-notification:

o Days required for the first pre-notification = 14

o Days required for recurring pre-notification

The creditor has to send pre-notifications for each direct debit at least 14 days prior to

the due date. Pre-notifications have to include at least:

Amount

Due date

Creditor ID

Mandate ID

Bank submission:

o Days required for the first core bank schema submission = 5

The number of days prior to the first submission must be at least 5 working days

before due date and not earlier than 14 calendar days to be received by the customers

bank.

o Days required for recurring core scheme bank submissions = 2

The number of days prior to the recurring submission must be at least 2 working days

before due date and not earlier than 14 calendar days to be received by the customers

bank.

o Days required for the first B2B bank submission = 1

o Days required for recurring B2B bank submission = 1

o Days required for the first COR1 bank submission = 1

o Days required for recurring COR1 bank submission = 1

The number of days prior to the first and recurring submission must be at least 1

working day before due date and not earlier than 14 calendar days to be received by

the customers bank.

Expiration:

o Months between usage and expiration

The mandate is valid up to the termination by the customer. It loses its validity, if

more than 36 months have passed since the last valid direct debit



4. Select FastTab Number sequences

5. Select Reference= Direct Debit Mandate ID

6. Enter the Number sequence code created for SEPA direct debit (SEPA DD)

Setup a Method of payment for SEPA direct debit 1. Go to Accounts receivable>Setup>Payment>Method of payment

2. Ctrl+N to create an new method of payment

3. Enter:

Method of payment: SEPA DD DE

Period: Invoice

Description: SEPA DD (DE)


Account type: BANK

Payment account: EURBANK

Require mandate: YES



5. Go to FastTab File formats

6. Click button Setup

7. To use the file format for Germany select SEPA ISO20022 Direct Debit DE

8. Select SEPA ISO20022 Direct Debit DE for the field Export format





Setup customer record including direct debit mandate and customer bank

account 1. Go to Accounts receivable >Common forms>Customer Details

2. Select a Customer or create a new one (e.g. SEPA Customer NL)

3. Go to FastTab Addresses and enter an address within the EU (e.g. NLD)

4. Make sure the Country/region setup (Basic>Setup>Addresses>Country/region) European

economic area was marked for the related country/region

5. Go to FastTab Payment

6. Enter Method of payment: SEPA DD DE

7. Go to field Bank account

8. Create a Bank account for the vendor (e.g. NL BANK) with Currency: EUR



9. Within FastTab General enter SWIFT code and IBAN

SWIFT code: ABNANL2A

IBAN: NL18ABNA0484869868

Save


11. Add country/region: NL



12. Close the Customer bank account form and select Bank account for the Bank account field

within the customer payment FastTab

13. Go to button Setup>Direct debit mandate

14. Click Ctrl+N to create a new Direct debit mandate

15. Mandate ID will be set automatically if the number sequence code had been set up to

Continuous

16. Enter:



Bank account: NL Bank

Signature date: 2/19/2014

Mandate scheme: Core/Core1 or B2B


Timing: Should be entered automatically

Expected numbers of payments: 100

Usage count: This field is set to 0 for new mandates and will update automatically with

each invoice payment

Click ok



CORE/COR1 vs. B2B Many legacy direct debit schemes were pretty efficient and allowed creditors to collect according

to various business requirements. Some legacy schemes allowed collections to be submitted to

the bank / clearing 1 day prior to the collection date. This has now changed under SEPA direct

debit CORE processing where the requirement is for collection instructions to be submitted 2 days

prior to the due date (for recurring collections).

1. Recognizing this in the CORE scheme, the EPC updated the SEPA Direct Debit rulebook

which created a local instrument ‘COR1‘handling a shorter processing cycle of Due Date-1

day. This allowed the creditor to submit the collection file 1 day before collection date

2. COR1 SEPA direct debit collections is a purely optional scheme, and it is up to the bank if

they wish to support COR1

3. So far only Austria, Germany and Spain support COR1 processing

4. Given that existing / legacy collection scheme facilitates submitting the direct debit file one

day prior to the due date, it is likely that the COR1 scheme will prevail in Austria, Germany,

Spain, and CORE will be used for cross border euro currency collections

5. Aside from being able to submit the first (FRST) and recurring (RCUR) collections 1 day

prior to the due date, all other aspects of COR1 SEPA direct debit collections align with the

CORE scheme

6. To collect using COR1 you must explicitly refer to the COR1 SEPA direct debit scheme

within the XML Payment Information tag as follows:

<PmtTpInf>

<SvcLvl>

<Cd>SEPA</Cd>

</SvcLvl>

<LclInstrm>

<Cd>COR1</Cd>

</LclInstrm>

There are two SEPA Direct Debit schemes: Core/COR1 and B2B. In below table are some of the

key differences to be aware of.



Differences between SEPA Core and B2B Schemes

Column1 CORE/COR1 SDD B2B SDD

Bank

Participation Mandatory

Optional

-> Your customer must ensure their bank

is aware that you will debit the customer

under the B2B scheme. Not all banks are

‘enrolled’, and if your customer fails to

notify their bank, your B2B SDD will be

rejected

Usage With Consumers and Companies With Companies only

Refund Right

-> 8 weeks after debit

-> 13 months after debit (in case

of missing mandate)

-> No refund right after debit

Process

1. Creditor sends Mandate to

Debtor

2. Debtor sends signed Mandate

to Creditor

3. Creditor captures Mandate

data

4. Creditor stores Mandate

1. Creditor sends 2 Mandate copies to

Debtor

2. Debtor:

i. Sends signed Mandate to Creditor

ii. Sends signed Mandate to their bank to

authorize account for B2B collections

3. Creditor captures Mandate data

4. Creditor stores Mandate

Submission

Deadlines

1. D–14 CD: Customer pre-

notification of amount and due

date (unless other timeframe is

agreed)

2. D–5 BD: Submission of first

and one-off SDD

3. D–2 BD: Submission of

subsequent SDD

1. D–14 CD: Customer pre-notification of

amount and due date (unless other

timeframe is agreed)

2. D–1 BD: Submission of first, one-off

and subsequent SDD

File format

XML ->

<Cd>CORE</Cd> or

<Cd>COR1</Cd>

XML ->

<Cd>B2B</Cd>

Reachable

customers

SEPA DD CORE/COR1 can be

used for B2B and B2C

SEPA DD B2B can be used for B2B area

only. It is not allowed to use this scheme

for private end users.



Create a free text invoice for direct debit mandate customer 1. Go to Accounts receivable>Common forms> Free Text Invoice Details

2. Crtl+N to create a new free text invoice

3. Select customer account: SEPA Customer NL (1104) and enter:

Date: 2/19/2014

4. Go to FastTab Invoice lines

Description: Test DD

Main account: 4020

Amount: 1.000,00

5. Go to Posting > Free text invoice

6. Within the Post free text invoice form mark Posting and Print invoice



7. A SEPA Notification Header should be printed on the invoice



Create the payment and generate a SEPA direct debit file 1. Go to Accounts receivable/Journals/Payments/Payment journal

2. Ctrl+N to create a new journal

3. Click Lines

4. Within the journal voucher enter:

Date: 2/20/2014

Account: 1104 for SEPA Customer NL

Offset account type: Bank

Offset account: EURBANK

Payment status: is set to ‘None’

Method of payment: SEPA DD DE

5. Go to Functions >Settlement

6. Select an invoice for payment

7. Close the Settle open transaction form



8. Back to the journal go to Functions > Generate payments

9. In the Generate payment form select:

Payment method> Method of payment: SEPA DD DE

Export format: SEPA ISO20022 Direct Debit DE

Bank account: EURBANK

Show format dialog: YES

Click OK

10. Within the SEPA Direct Debit for Germany form:

Remittance Information: Unstructured

Variant: 003

File name: Select a place and a file name where the SEPA file should be stored

Control report: YES

Variant 003 is used in Germany ONLY, in all other countries the variant 02 is used, as

well this field can remain blank.



OK

Installing KB 2926525 will add fields and checkboxes

Processing date

Report parameter ‘Covering letter from quantity of invoices’

Attending note

Payment advice

11. A Control list report will be created

12. Go back to the journal



13. Payment status changed to ‘Sent’ and the SEPA direct debit files has been created

14. Go to the folder where the SEPA file should be stored



Additional information Releases for SEPA Credit Transfer and SEPA Direct Debit

1. KB 2769783

Credit Transfer for generic, Belgium and Netherland country specific formats

2. KB 2786631

Direct Debit for generic, Belgium and Netherland country specific formats

3. KB 2851350

Credit Transfer and Direct Debit for generic, France, Germany and Spain country specific

formats

4. KB 2871913

Credit Transfer for generic, Italy and Finland and Direct Debit for generic and Finland

specific country formats

Affected countries: Belgium, Netherlands, France, Germany, Spain

5. KB 2880634

Credit Transfer for generic, Austria and Germany and Direct Debit for generic and

Germany specific country formats

Affected countries: Belgium, Netherlands, France, Germany, Spain, Italy, Finland

6. KB 2902097

Cumulative SEPA credit transfer and SEPA direct debit update is available for Austria direct

debit specific country format, update COR1 mandate scheme and changes in MT940 file

import format functionality in Microsoft Dynamics AX

7. KB 2926525

The "Attending note" and "Payment advice" reports that exist for other payment methods

should also be available for the SEPA Credit Transfer and SEPA Direct Debit payment

method. To comply with this, a new update is available in Microsoft Dynamics AX 2009

SP1 for all supported countries: Austria, Belgium, Germany, Spain, Finland, France, Italy,

Netherlands and generic format.

8. KB 2926526

A country specific update is available to support SEPA export formats for remittance

journal in Promissory Notes and Bill of Exchange in Microsoft Dynamics AX 2009 SP1,

Microsoft Dynamics AX 2012 and Microsoft Dynamics AX 2012 R2

9. KB 2959800

This article describes a new payment format is available for Austria for non-SEPA

payments in Microsoft Dynamics AX 2009 Service Pack 1.

10. KB 2963902

SEPA Direct Debit: Generated file is rejected by bank due to optional amendment

information populated on the file

11. KB 2974343

Netherlands/NLD: Direct Debit Mandate ID is empty for credit note

12. KB 2990462

Transfers identified as PAYROLLS through SEPA credit transfer file

13. KB 2991530

SEPA IT: Credit transfer file is missing tag <PmtTpInf>



References

European Payments Council (EPC) - http://www.europeanpaymentscouncil.eu/

Validation tools

ISO20022:

https://portal.gefeg.com/ValidationPortal/(S(q3wk5nfikp0rwuqjr5rt2plc))/ISO20022/login.aspx?Pr

oj=61&Lang=EN

Austria:

https://portal.gefeg.com/validationportal/(S(xvz4p3imvwhxdcovjuklzofi))/STUZZAXML/login.aspx

?Proj=26&Lang=EN

ING bank – different countries:

http://certification.softshare.com/Certification/welcome.do?go=ING

http://www.europeanpaymentscouncil.eu/

https://portal.gefeg.com/ValidationPortal/(S(q3wk5nfikp0rwuqjr5rt2plc))/ISO20022/login.aspx?Proj=61&Lang=EN

https://portal.gefeg.com/ValidationPortal/(S(q3wk5nfikp0rwuqjr5rt2plc))/ISO20022/login.aspx?Proj=61&Lang=EN

https://portal.gefeg.com/validationportal/(S(xvz4p3imvwhxdcovjuklzofi))/STUZZAXML/login.aspx?Proj=26&Lang=EN

https://portal.gefeg.com/validationportal/(S(xvz4p3imvwhxdcovjuklzofi))/STUZZAXML/login.aspx?Proj=26&Lang=EN

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