The Irish business community is badly unprepared for the imminent arrival of the Single Euro Payment Area (SEPA) on 1 February 2014, with 42% yet to make the necessary changes to their accounting systems, according to a survey by the Irish business and employers’ confederation (Ibec).
With the SEPA migration end date just months away now, the Ibec study of 300 Irish companies found that one-in-two were unaware of the impact the payments harmonisation legislation would have on their payment procedures.
Finding a technolgoy provider or bank to provide a white labelled solution to achieve quick compliance will also be increasingly difficult as the end date moves nearer due to excess demand in a situation that may well mirror the Y2K skills and availability crunch.
Ibec senior economist, Reetta Suonperä, commented: "The existing national payments systems will close on 31 January 2014. To pay and collect electronic euro payments after that date, businesses will need to ensure that payroll, direct debit and accounting systems are SEPA ready.
"Businesses need to act now to ensure that their payroll and direct debit collection systems continue to function without problems."
Smaller firms employing fewer than 50 employees are the furthest behind, with one-in-two yet to start making any preparations in Ireland.
While there is plenty of advice and support available from banks and software providers to corporate treasurers and other finance professionals tasked with achieving SEPA compliance, Suonperä explains that Ibec’s finding show barely a third (31%) of smaller firms have discussed SEPA with their bank and just over one in five (22%) have consulted with their payments software provider.
Medium-sized firms with 50-249 employees are only slightly better prepared. More than four in ten have not started preparations and only one in ten report that they are SEPA ready.
Ireland’s largest businesses are in better shape, with one-in-five now ready and 70% updating systems for SEPA compliance.
"Completing the necessary changes to payments and accounting systems will take several months, so it is essential businesses act now to ensure they are able to process electronic payments come 1 February 2014," concluded Suonperä.