Minister tackles long payment terms

Minister of Employment Matias Marttinen (NCP) told MTV Uutiset that he has launched a review of excessively long payment terms in business-to-business invoicing.

Tiina Toivonen, Legislative Affairs Manager at Suomen Yrittäjät, the Finnish SME association, says “big businesses, in particular, treat small companies as banks and at the same time violate the Act on Payment Terms.”

“Many small business owners are struggling to survive because larger companies in particular stretch out their payments through long payment terms or deliberate delays. We have a law that is not complied with in practice. The current situation rightly offends business owners’ sense of justice.

“By law, payment terms on business-to-business invoices may only exceed 30 days if both parties expressly agree. In a survey conducted in the spring, 57% of SMEs said that their 30-day-plus payment terms had not been agreed in the statutory manner,” Toivonen says.

Marttinen told MTV that “in this situation, the small business owner always loses”.

“They are always in a weaker position, and it is absolutely Parliament’s job to ensure that small business owners’ position is strengthened,” Marttinen said.

Yrittäjät.fi reported earlier this week on a transport sector entrepreneur whose two large clients had unilaterally imposed payment terms of 60 and 90 days. The entrepreneur refused to accept the longer term and lost the client as a result.

Read also: Business told to accept 90-day payment terms – owner had enough

Supervisory authority

Suomen Yrittäjät has for years called for a supervisory authority to monitor compliance with payment terms regulation in Finland.

Marttinen says the Ministry of Economic Affairs and Employment has now launched a review of long payment terms.

“We are going through the legislation and looking at whether, for example, the Finnish Competition and Consumer Authority could be given a new responsibility in this area,” Marttinen told MTV.

He says such an authority would monitor compliance with the law more effectively than at present.

“So if a small business owner has to wait longer for payment than the law stipulates, they could contact the authority, which would also help resolve the matter,” says Marttinen says.

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