Survey: large companies illegally extending payment terms

Over half of small and medium-sized enterprises (SMEs) who responded to the latest Yrittäjägallup survey said that the law on payment terms was not being obeyed. In addition to large companies, state and municipally owned companies delay payment of invoices to beyond the statutory limits.

“Large companies treat small companies as their banks by breaking payment-term legislation. Business owners say that a large proportion of state and municipal companies also set payment terms longer than 30 days without their express agreement. The way it’s done in Finland is a large company simply tells a small business owner that they’ll get their money later,” says Tiina Toivonen, Legal Affairs Manager at Suomen Yrittäjät, the Finnish SME association.

In the Yrittäjägallup business owner survey in February, 53% of respondents said that their 30-day-plus payment terms had not been agreed on in the manner required by law.

In particular, industry and construction businesses suffered financially from their business partners’ long payment terms.

“That is why the present Government ought to legislate to secure small businesses’ solvency. The overall trend is that payment terms are getting longer — some of them legally and some of them illegally. Delays to shorter payment terms can also cause businesses problems, because they have wages, taxes and other overheads to pay,” Toivonen says.

Of the business representatives surveyed, 35% said their clients had extended their payment terms in the past two years. This share has risen slightly from the 33% responding that way in August 2023.

Large companies (73%) are the most common culprits behind extended payment terms. This figure has also grown significantly since the last survey.

A total of 1,339 representatives of small and medium-sized enterprises responded to the Yrittäjägallup survey, which gathers SMEs’ views, in February.

Only half of payment terms over one month by agreement

By law, payment terms on business-to-business invoices may only exceed 30 days if both parties expressly agree.

Around 40% of businesses said they had to wait over 30 days for their invoices to be paid. Of these companies, over half say the law has not been observed when payment terms of over 30 days have been used. That means the parties did not agree on the payment term as required by law. This is a particular problem in the service, construction and retail sectors.

“In half of the cases in which a company providing a product or service has been forced to await payment for over a month, they have not agreed to the longer payment term, even though the law requires it. This is a big problem which must be tackled.

“Responding to the survey, business owners say that state and municipal companies have also extended payment terms beyond the 30 days without specifically agreeing with them. We demand an investigation into this problem and demand that public-sector companies follow the law in an exemplary fashion,” Toivonen says.

Long payment terms lead to bankruptcies

Long payment terms harm SMEs financially. If the payment term is over 30 days, over half of SMEs suffer financial harm (55%). When the payment terms are extended to 60 days and beyond, over 60% of companies are financially damaged.

“One in four bankruptcies are estimated to be caused by a company not getting its money on time. We’ve seen record-high bankruptcy figures in recent years, and we expect the statistics to get even grimmer during the first half of this year. That’s another reason it’s important that the breaches of the law and the significant harm they cause business owners end,” Toivonen says.

Government enforcement could provide solution

At the same time, around half of respondents are of the view that government agencies should monitor adherence to the law.

The construction sector, in particular, supported enforcement (65%). Suomen Yrittäjät agrees.

“Under the last government, a justice ministry working group made a detailed proposal for bringing law breaking under control through monitoring by the authorities. This legislative amendment proposal should be placed before Parliament as a matter of urgency,” Toivonen says.

Last autumn, the European Commission proposed that member states set up enforcement authorities to monitor payment terms.

“The proposal is generally good and contains changes that Suomen Yrittäjät has lobbied for. Shorter payment terms and more effective enforcement could strengthen smaller businesses’ solvency in particular.


  • Extension of payment terms affects almost 100,000 SMEs.
  • The greatest financial harm from payment-term extensions is caused to SMEs in industry (45% of respondents) and construction (38%).
  • Business-to-business payment terms may exceed 30 days if both parties have agreed on it.
  • Over half of companies say that the matter has not been agreed in cases where a business-to-business payment term has been extended to over 30 days.
  • Representatives of the service and construction sector, as well as single-person businesses, particularly report their contractual partners not observing payment-term legislation.

Read the results in more detail here.

How the survey was conducted

A total of 1,339 representatives of SMEs responded to the survey, conducted by Veriana on behalf of Suomen Yrittäjät.
The survey was conducted between 7 and 13 February 2024. The confidence interval for the survey results is +/- 2.7 percentage points.

Further information: Tiina Toivonen, Legal Affairs Manager at Suomen Yrittäjät, tel. +358 41 528 5679

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