The Commission fears that companies using non-approved systems may find their accounts do not balance, auditors not sign off figures or may be unable to trade altogether.
The EC called an emergency meeting last week due to fears the SME community has shown little interest in making their financial systems compliant.
Among the initiatives now being considered to kick-start SMEs into using accredited software is the setting up of a working party to raise awareness on the issue.
EC spokesman for economic and financial affairs, Gerassimos Thomas, said: ‘The preparation for the euro by SMEs is not good and is below our expectations. We will spend the rest of this year addressing this situation’.
Concerns have risen at the EC because all companies within the Eurozone must have software installed and ready before 1 January 2002 – the date when euro notes and coins start circulating – however the conversion process has been known to take three years for larger organisations.
UK companies which trade within the eurozone will also need to be able to handle the currency. Although they will not be legally required to be euro compliant, thousands of companies will face commercial pressures to ensure compliance.
Dennis Keeling, chief executive of business software developer trade association BASDA attended the talks. He said: ‘SMEs have been very slow in taking up the euro issue. As a result the EC was very concerned and wanted to find out whether there was a problem with software or the SMEs’.
It is understood further meetings are scheduled to take place in June. The EC is worried that SMEs will not take the compliance problem seriously because many SMEs did not encounter problems with the Millennium Bug.
The EC is understood to be anxious that only 26 software vendors with BASDA membership have met the standard for euro conversion while an estimated 270 companies have not applied for accreditation.
Vendors such as Scala Business Solutions, Coda and Systems Union have received accreditation for their product, however many more have failed or not applied for testing.