Using Direct Debit

You prepare direct debit orders based on entries, which represent a payable amount of money, and upload them to your bank. The way you create or retrieve entries depends on the integration of JustOn Cash Management with your Salesforce org, for example, with JustOn Billing & Invoice Management.

Unless specifically agreed with the bank, JustOn Cash Management uses the basic character set defined by the European Payment Council when creating SEPA payment orders. For details, see SEPA Requirements for an Extended Character Set (UNICODE Subset) - Best Practices.

About SEPA Direct Debit

The European Payments Council (EPC) has established the single euro payments area (SEPA) to standardize cashless euro payments across Europe. It defines, among others, SEPA Direct Debit schemes (SDD): one primarily designed for B2C businesses (SDD Core), and one exclusively for B2B businesses (SDD B2B). The two schemes set common rules for transferring money from a debtor to a creditor, but vary in details (see SEPA Direct Debit).

SEPA Direct Debit is centered around a mandate, which allows the creditor to prove their request for collecting money. The collection is initiated by the creditor, submitting the order to their bank. The order includes information like mandate ID, amount, collection date and debtor IBAN. The bank then executes the order, withdrawing the money from the debtor's account and putting it to the creditor's account.

The common rules include:

• The mandate is signed by the debtor before the first transaction (typically 14 days before the first collection).
• The mandate allows one-off or recurrent collections and can be revoked by the debtor at any time.
• The due date of a collection must not be more than 14 days in the future.

Depending on the scheme (Core or B2B), various timeframes and rules apply for the debtor to object to the money transfer and to order a reverse transaction.

The SEPA Direct Debit Core scheme is mandatory for transactions with consumers (B2C) and optional for transactions with businesses (B2B). Under SDD Core, a debtor can request a refund ("no-questions-asked") within eight weeks of the collection date. In case of an unauthorized transaction – which must be proven –, a debtor can ask for a refund within 13 months of the collection date.

The SEPA Direct Debit B2B scheme is exclusively for businesses. Under SDD B2B, the debtor is not entitled to obtain a refund for an authorized transaction. The debtor's bank, however, may still return a transaction under certain circumstances within three days. To ensure that a transaction is authorized under SDD B2B, the debtor's bank must check whether there is a valid mandate before executing the collection.

This overview on SEPA Direct Debit does not constitute any legally effective advice. JustOn cannot and must not provide such services. For any detailed questions and current information on implementing SEPA Direct Debit, contact your bank.

SEPA Direct Debit transaction workflow

This section describes the typical workflow (assuming that all entries are eligible and the business setup is complete) and the lifecycle of a SEPA Direct Debit transaction in JustOn Cash Management.

(1) User opens EBICS Direct Debit dialog from entry list view

This displays a confirmation, prompting for either continuing or aborting the process.

(2) User starts direct debit job

JustOn Cash Management validates the input records (business entities, payment instruments, entries). The dialog shows the job progress.

As a result of the job execution, JustOn Cash Management

• Creates Payment records with the status Pending
• Creates Entry Item records with an Expected Amount, which prevents entries from being processed repeatedly
• Builds SEPA XML files (including a unique end-to-end ID) and sends them to the bank via EBICS

(3) Authorized user releases orders

The signature (under the EDS class E or A/B) must be given in the banking system.

As a result, the bank processes all direct debit requests and collects the money.

(4) User retrieves bank statements

When a matching bank statement item is found (from the original bank account and according to the end-to-end ID), it is automatically associated with the corresponding payment. Consequently, JustOn Cash Management

• Updates the amount on the payment (as related to entries)
• Sets the payment status to Collected
• Adjusts the amount on the entry item

Storing SEPA Mandates

Exporting SEPA Direct Debit orders requires SEPA Direct Debit Mandates, a customer's authorization for a business to collect money. Hence, you need a way to store and manage the SEPA mandate information for your accounts.

JustOn Cash Management uses payment instruments to save your customers' (debtors') SEPA mandates as well as bank account information.

After you have obtained a SEPA mandate from a customer (electronically or via postal mail), you add it to the payment instrument assigned to the corresponding account.

1. Open the payment instrument you want to modify, or create a new one if necessary.

2. Click Edit and specify the information as required.

   The mandatory information include:

   Field	Description
   Business Entity	Lookup to the related business entity A SEPA mandate cannot be used for different business entities or SEPA Creditor Identifiers.
   Account Holder	The name of the bank account holder (debtor)
   IBAN	The bank account number
   BIC	The SWIFT BIC of the bank account Required if the debtor's or the creditor's bank is located in non-EEA SEPA countries Andorra, Monaco, San Marino, Switzerland, United Kingdom or Vatican City State.
   Bank Name	The name of the debtor's bank
   Direct Debit Mandate Type	The type of the direct debit mandate, either Core or B2B
   Direct Debit Mandate Granted	The date on which you received the debtor's SEPA mandate
   Direct Debit Mandate Reference	A unique string that identifies the SEPA mandate
   Money Flow Incoming	Must be unrestricted, is treated as unrestricted if empty
   Type	Must be SEPA Mandate (allows for direct debits and credit transfers)

3. Click Save.

   This completes the payment instrument configuration, preparing it for the direct debit order creation.

Info

To indicate the "health status", JustOn Cash Management saves the last captured amount and the corresponding timestamp to a payment instrument that holds a SEPA mandate when it is used for a direct debit transaction.

Creating Direct Debit Orders

Eligible entries for SEPA Direct Debit

To collect an entry successfully via SEPA Direct Debit, make sure that the following information is set accordingly:

Field	Description
Account	The associated account for the debtor
Type	The type of the entry, must be Debit
Business Entity	Lookup to the related business entity Must match the business entity of the payment instrument to be used.
Open Amount	The overall open amount For a debit, it must be a positive amount.
Payable Amount	The amount to pay (before a related payment is requested) Must be larger than 0 for the entry to be considered on direct debit order creation.
Statement Date	The effective date of the (legally binding) original statement
Statement Payment Due Date	The payment due date of the statement, that is, the agreed collection date
Requested Payment Method	The requested payment method for the entry, must be SEPA Using the integration with JustOn Billing & Invoice Management, the value is taken from the invoice, so the invoice payment method must already be set to SEPA.
Requested Payment Instrument	Optionally, allows to select a particular active payment instrument according to the selected account. Falls back to the first active payment instrument of the account if empty.
Requested Bank Account	Your (the creditor's) bank account – the target of the collection. Falls back to the Preferred Bank Account of the business entity if empty.
Payment Reference	Describes the purpose of the payment, a human-readable description for the money transfer. Will be displayed in the bank account statements.

The key date for SEPA transactions is the Statement Payment Due Date of the entry. Entries are eligible if the date is not empty and not beyond the next 14 days from today. If the date is in the past, JustOn Cash Management corrects it to TODAY + 1 for it to be accepted by the bank.

Info

Make sure to inform your debtors about an upcoming payment collection. To this end, you send a prenotification (typically, an invoice) to your customer – the debtor – with an appropriate lead time prior to creating direct debit orders.

To start the direct debit order generation:

1. Open the Entries tab.

2. Filter the list view or select the entries to be processed.

   Continuing without selection includes all listed entries.

   Entries to be processed in one go must be subject to the same bank access. The relevant bank access is determined via Requested Bank Account on the entry or, if this is not set, via Preferred Bank Account on the business entity. Otherwise, the SEPA order creation and upload will fail.

3. Click Direct Debit.

   This displays the number of entries to be processed.

   

4. Optionally, enable Cancel Pending Payments.

   

   This will cancel all payments that have been issued previously for the involved entries to allow them for being charged again.

   Use this option with extreme care. Multiple submissions may cause multiple charges in case the bank has already processed the original payment order.

5. Click Next.

   This starts the SEPA order creation and upload. The page shows the job progress and log messages.

   

   Even in case of an error, the job may still complete. To be sure of the direct debit order generation, review the Error Message field of the processed entries, or create a report to show the result.

   Clicking Finish returns you to the Entries tab.

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SEPA Direct Debit and SEPA Credit Transfer allow to combine multiple transactions using a Batch Booking parameter. This setting controls how the combined transactions are displayed on bank statements – usually, batched transactions appear as one bank statement item. Organizations use this option to avoid information disclosure.

Be aware that banks still process batched transactions individually. The subsequent handling does not change: each transaction results in a single payment, whether it is part of a batch or not.

JustOn Cash Management allows for enabling SEPA batch bookings for a specific bank account. If you want to use batch bookings, the relevant bank account must be configured accordingly, see Configuring SEPA Batch Booking Creation.