Set up the Single Euro Payments Area (SEPA) direct debit mandate

  • 15 minutes

The Single Euro Payments Area (SEPA) is set up by the European Commission, and dictates that all electronic payments are considered domestic, regardless of the country or region where the individual, business, organization, and bank are located.

There is no difference between national and cross-border payments. SEPA includes the 27 member states of the European Union, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), and the United Kingdom. SEPA helps create a single market for payment transactions within the European Economic Area (EEA). Ultimately, SEPA is expected to reduce the number of payment formats that banks, businesses, and individuals must work with.

A Single Euro Payments Area (SEPA) direct debit lets a creditor collect funds from a customer's bank account, provided that the customer has granted a signed mandate to the creditor.

The mandate that the customer signs authorizes the creditor to collect a payment and instructs the customer's bank to pay the collection. This topic is organized to show the process for setting up SEPA direct debit mandates.

SEPA Direct Debits create, for the first time, a payment instrument that can be used for both national and cross-border euro direct debits throughout the 32 SEPA countries or regions.

Two schemes are available: the SEPA Core Direct Debit Scheme and the SEPA Business to Business (B2B) Direct Debit Scheme. Both schemes use the same file format.

Create a direct debit mandate for a customer

The steps below describe how to:

  • Create a direct debit mandate for a customer.
  • Define the electronic payment method.
  • Add a direct debit mandate to a customer.

Create a bank account

  1. Go to Modules > Accounts receivable > Customers > All customers.
  2. In the list, select a record.
  3. On the Action Pane, select Customer.
  4. Select Bank accounts.
  5. Select New.
  6. In the Bank account field, enter a value.
  7. In the Name field, enter a value.
  8. In the IBAN field, enter the IBAN number provided by your banking institution.
  9. In the Currency field, enter a value.
  10. Select Save.
  11. Close the page.
  12. Go to Modules > Cash and bank management > Bank accounts > Bank accounts.
  13. In the list, find and select the desired record.
  14. In the list, select the link in the selected row.
  15. Select Edit.
  16. Expand the Additional identification FastTab.
  17. In the Direct debit ID field, enter a value.
  18. In the IBAN field, enter the IBAN number provided by your banking institution.
  19. Close the page.

Define the electronic payment method

  1. In the Navigation pane, go to Modules > Accounts receivable > Payments setup > Methods of payment.
  2. Select New.
  3. In the Method of payment field, enter a value.
  4. In the Description field, enter a value.
  5. In the Payment type field, enter or select Electronic payment. The payment type for a direct debit mandate method of payment must be Electronic payment.
  6. Select Yes in the Require mandate field.
  7. Close the page.

Add a direct debit mandate to a customer

  1. Go to Modules > Accounts receivable > Customers > All customers.
  2. In the list, select a record.
  3. Select Edit.
  4. Expand the Payment defaults FastTab.
  5. In the Method of payment field, enter or select a value.
  6. Expand the Payment defaults FastTab.
  7. Expand the Direct debit mandates FastTab.
  8. Select Add.
  9. In the Bank account field, enter or select a value.
  10. In the Creditor bank account field, enter or select a value.
  11. In the Payment frequency field, enter the number of payments that you expect to process for this mandate.
  12. Select OK.
  13. Select Print.
  14. Select Mandate report.
  15. Close the page.
  16. Select Edit.
  17. In the Signature date field, enter a date.
  18. Select Yes.
  19. Enter the location where the mandate was signed.
  20. Select OK.
  21. Close the page.