AX 2009 Setup SEPA Credit Transfer and Direct Debit

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
AX 2009
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

AX 2009
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
AX 2009
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
AX 2009
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
AX 2009
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
AX 2009
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
AX 2009
Save

11. Add country/region: NL
12. Select the created bank account for field bank account within the vendor payment FastTab
AX 2009
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
AX 2009
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
AX 2009
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 vendors 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
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:
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.
AX 2009
10. Click OK to create the payment file

11. Go to the folder where the SEPA files should be stored
AX 2009
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
AX 2009
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
AX 2009
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
AX 2009

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
AX 2009
Setup Accounts receivable parameters

1. Go to Accounts receivable>Setup>Parameters
2. Select FastTab Direct Debit
3. Enter required days
AX 2009
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
AX 2009
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
AX 2009
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
AX 2009
AX 2009
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
AX 2009
9. Within FastTab General enter SWIFT code and IBAN

SWIFT code: ABNANL2A
IBAN: NL18ABNA0484869868
Save
11. Add country/region: NL
AX 2009
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:
AX 2009
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
AX 2009
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 COR1handling 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.
AX 2009
Differences between SEPA Core and B2B Schemes

Column1 CORE/COR1 SDD B2B SDD
Optional
-> Your customer must ensure their bank
is aware that you will debit the customer
Bank
Mandatory under the B2B scheme. Not all banks are
Participation
enrolled, and if your customer fails to
notify their bank, your B2B SDD will be
rejected
Usage With Consumers and Companies With Companies only
-> 8 weeks after debit

Refund Right -> No refund right after debit
-> 13 months after debit (in case
of missing mandate)
1. Creditor sends Mandate to 1. Creditor sends 2 Mandate copies to

Debtor Debtor
2. Debtor sends signed Mandate 2. Debtor:
Process to Creditor i. Sends signed Mandate to Creditor
3. Creditor captures Mandate ii. Sends signed Mandate to their bank to
data authorize account for B2B collections
4. Creditor stores Mandate 3. Creditor captures Mandate data
4. Creditor stores Mandate
1. D14 CD: Customer pre-

notification of amount and due
1. D14 CD: Customer pre-notification of
date (unless other timeframe is
amount and due date (unless other
Submission agreed)
timeframe is agreed)
Deadlines 2. D5 BD: Submission of first
2. D1 BD: Submission of first, one-off
and one-off SDD
and subsequent SDD
3. D2 BD: Submission of
subsequent SDD
XML ->
XML ->
File format <Cd>CORE</Cd> or
<Cd>B2B</Cd>
<Cd>COR1</Cd>
SEPA DD B2B can be used for B2B area

Reachable SEPA DD CORE/COR1 can be
only. It is not allowed to use this scheme
customers used for B2B and B2C
for private end users.
AX 2009
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
AX 2009
7. A SEPA Notification Header should be printed on the invoice

AX 2009
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

AX 2009
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
Variant 003 is used in Germany ONLY, in all other countries the variant 02 is used, as
well this field can remain blank.
File name: Select a place and a file name where the SEPA file should be stored
Control report: YES
AX 2009
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

AX 2009
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

AX 2009
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>
AX 2009
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

AX 2009 Setup SEPA Credit Transfer and Direct Debit

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AX 2009

SEPA (ISO 20022 XML)

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

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

Setting rules and guidelines for handling euro payments.

The EPC is committed to delivering three pan-European payment instruments:

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

Setup Credit Transfer

Setup Company information

Setup Country/region to work with SEPA

4. Check if the ISO code: DE is added

Setup a bank account for the legal entity (CEE)

Setup a Method of payment for SEPA credit transfer

4. Go to FastTab File formats

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

10. Go to FastTab Address

Create and export payments using SEPA payment format

Note: Information if Structured/Unstructured

Finland - For structured remittance information:

9. Within the Dialog form fill all necessary values

Batch booking true/false

10. Click OK to create the payment file

Setup SEPA Direct Debit

Setup company information

Setup Country/region to work with SEPA

4. Check if the ISO code: DE is added

Setup a bank account for the legal entity (CEE)

Setup SEPA Direct mandates

4. Go to FastTab General and enter:

Setup Accounts receivable parameters

Note (depending on the bank and country):

o Days required for recurring core scheme bank submissions = 2

o Days required for the first B2B bank submission = 1

4. Select FastTab Number sequences

Setup a Method of payment for SEPA direct debit

4. Go to FastTab General and enter:

5. Go to FastTab File formats

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

7. Go to field Bank account

9. Within FastTab General enter SWIFT code and IBAN

13. Go to button Setup>Direct debit mandate

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

Bank account: NL Bank

Mandate scheme: Core/Core1 or B2B

17. Go to FastTab General

CORE/COR1 vs. B2B

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

Differences between SEPA Core and B2B Schemes

-> 8 weeks after debit

1. Creditor sends Mandate to 1. Creditor sends 2 Mandate copies to

1. D14 CD: Customer pre-

SEPA DD B2B can be used for B2B area

Create a free text invoice for direct debit mandate customer

4. Go to FastTab Invoice lines

5. Go to Posting > Free text invoice

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

Create the payment and generate a SEPA direct debit file

7. Close the Settle open transaction form

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

10. Within the SEPA Direct Debit for Germany form:

Installing KB 2926525 will add fields and checkboxes

11. A Control list report will be created