Collection and payment remittances: What they are and how to generate them
Posted: Wed Dec 18, 2024 6:08 am
Managing collection and payment remittances is part of the daily routine of accountants and treasury managers in companies.
We explain what collection and payment remittances are.
Learn about the different ways you can generate remittances.
Since February 1, 2016, according to Regulation 260/2012, SEPA payment instruments must be used for collection and payment remittances .
SEPA stands for "Single Euro Payments Area " .
Its aim is to establish czechia email list common rules, eliminating differences between national and cross-border payments, thus facilitating economic and monetary integration in Europe.
For the preparation of collection and payment remittances in compliance with SEPA regulations, the use of the IBAN is mandatory , even in national operations. Therefore, the IBAN replaces the Customer Account Code (CCC) in the remittances of direct debits (Rule 19), payrolls and transfers (Rule 34) and credit advances (Rule 58) .
The IBAN is an international payment account identifier number that uniquely identifies an individual payment account in a Member State, the elements of which are specified by the International Organization for Standardization (ISO).
The format of the messages generated in remittances must comply with the ISO 20022 XML standard , whenever they transmit payment transactions to another payment service provider or through a retail payment system.
Download the FREE guide “Learn to manage your cash flow like an expert”
1) What is a direct debit?
A direct debit is a national or cross-border payment service intended to debit a payer's payment account , when the payment transaction is initiated by the beneficiary on the basis of the consent given by the payer.
The beneficiary must have a signed SEPA-CORE direct debit order in his possession to limit the timeframe for possible refunds to the 8-week period . If he does not have this authorization with express consent, the period for returning a receipt is extended to 13 months.
2) What are collection and payment remittances?
Collection and payment remittances are a file that is sent to the bank to manage collections or payments.
Collection remittances : these are used to group together your clients' bills pending collection to be sent to your bank. The bank manages the collection and pays the amount into your current account. In the collection remittance, a transfer is made to charge the drawee's account and credit it to the account of the transferor who issued the remittance.
Payment remittances: These are used to send a payment file to your bank to arrange payments via transfers to suppliers or employees. These amounts are then charged to your account and deposited into the accounts of the beneficiaries.
In both cases, the bank is simply an intermediary in the collection or payment management that executes the instructions received. Therefore, the financial institution is not responsible for the successful completion of the operation.
3) What types of remittances exist?
Based on their payment date, we can classify remittances into two types:
At sight : payment is made effective at the time the remittance is presented.
Term : Payment is made on a date specified in the remittance.
We can also classify them based on the documentation included:
Simple : They only carry financial documents, such as checks, receipts or promissory notes.
Documentary : These carry commercial documents that may or may not be accompanied by a financial document, such as a commercial invoice, a transport document, a certificate or an insurance policy.
4) What data should be included in collection and payment remittances?
The following data must be included in the collection and payment remittances:
In the case of transfer remittances to employees, the name of the employee, the IBAN of their account and the amount to be received must be included.
In addition, the following information must also be included to identify the remittance:
Creditor identification or reference that allows for verifying debts and filing claims if applicable.
IBAN code of your bank account.
5) How to generate your collection and payment remittances?
There are two options for generating your collection and payment remittances. One is easy and saves a lot of time. The other is a little more complicated and requires more time to generate and record your remittances.
The options to generate your remittances are the following:
With the program provided by your financial institution for managing remittances . These programs are hardly used by companies anymore. They are only used by some SMEs and self-employed people who have accounting and management programs that are not very operational or are obsolete.
With your management or accounting program , Sage 50 makes it easy for you to create your collection and payment remittances. To do this, it allows you to easily create them from your collection and payment forecasts and generate the file in SEPA format to send to your bank.
We explain what collection and payment remittances are.
Learn about the different ways you can generate remittances.
Since February 1, 2016, according to Regulation 260/2012, SEPA payment instruments must be used for collection and payment remittances .
SEPA stands for "Single Euro Payments Area " .
Its aim is to establish czechia email list common rules, eliminating differences between national and cross-border payments, thus facilitating economic and monetary integration in Europe.
For the preparation of collection and payment remittances in compliance with SEPA regulations, the use of the IBAN is mandatory , even in national operations. Therefore, the IBAN replaces the Customer Account Code (CCC) in the remittances of direct debits (Rule 19), payrolls and transfers (Rule 34) and credit advances (Rule 58) .
The IBAN is an international payment account identifier number that uniquely identifies an individual payment account in a Member State, the elements of which are specified by the International Organization for Standardization (ISO).
The format of the messages generated in remittances must comply with the ISO 20022 XML standard , whenever they transmit payment transactions to another payment service provider or through a retail payment system.
Download the FREE guide “Learn to manage your cash flow like an expert”
1) What is a direct debit?
A direct debit is a national or cross-border payment service intended to debit a payer's payment account , when the payment transaction is initiated by the beneficiary on the basis of the consent given by the payer.
The beneficiary must have a signed SEPA-CORE direct debit order in his possession to limit the timeframe for possible refunds to the 8-week period . If he does not have this authorization with express consent, the period for returning a receipt is extended to 13 months.
2) What are collection and payment remittances?
Collection and payment remittances are a file that is sent to the bank to manage collections or payments.
Collection remittances : these are used to group together your clients' bills pending collection to be sent to your bank. The bank manages the collection and pays the amount into your current account. In the collection remittance, a transfer is made to charge the drawee's account and credit it to the account of the transferor who issued the remittance.
Payment remittances: These are used to send a payment file to your bank to arrange payments via transfers to suppliers or employees. These amounts are then charged to your account and deposited into the accounts of the beneficiaries.
In both cases, the bank is simply an intermediary in the collection or payment management that executes the instructions received. Therefore, the financial institution is not responsible for the successful completion of the operation.
3) What types of remittances exist?
Based on their payment date, we can classify remittances into two types:
At sight : payment is made effective at the time the remittance is presented.
Term : Payment is made on a date specified in the remittance.
We can also classify them based on the documentation included:
Simple : They only carry financial documents, such as checks, receipts or promissory notes.
Documentary : These carry commercial documents that may or may not be accompanied by a financial document, such as a commercial invoice, a transport document, a certificate or an insurance policy.
4) What data should be included in collection and payment remittances?
The following data must be included in the collection and payment remittances:
In the case of transfer remittances to employees, the name of the employee, the IBAN of their account and the amount to be received must be included.
In addition, the following information must also be included to identify the remittance:
Creditor identification or reference that allows for verifying debts and filing claims if applicable.
IBAN code of your bank account.
5) How to generate your collection and payment remittances?
There are two options for generating your collection and payment remittances. One is easy and saves a lot of time. The other is a little more complicated and requires more time to generate and record your remittances.
The options to generate your remittances are the following:
With the program provided by your financial institution for managing remittances . These programs are hardly used by companies anymore. They are only used by some SMEs and self-employed people who have accounting and management programs that are not very operational or are obsolete.
With your management or accounting program , Sage 50 makes it easy for you to create your collection and payment remittances. To do this, it allows you to easily create them from your collection and payment forecasts and generate the file in SEPA format to send to your bank.