Entrepreneurs/toiminimi - penalty interest on late invoices

[Hank W.]

Or you can "sell your bills" to one of these companies like Svea Rahoitus or Collector et al. They charge their slice of the cheese, but you get money like Manu dinner. (and Manu's dinner one thing you can ask your students about )

[tampereblue]

If you have a cash flow problem then you should change your payment terms. Eg: 8 days instead of 14 or whatever. Or agree some kind of milestone payments if you are working on a project basis.

If you are working for big companies I see no reason why you would NOT be paid on time (as long as they get your invoice in time for it to go through their system). Your invoice probably needs to be paid manually (presumably you are not printing bar codes on your invoices???) so that would slow things down. And then if the erapäivä falls on a weekend you won't see the cash in your account until the following working day etc etc.

I looked through my "Establishing and Doing Business in Finland" book and it makes no mention of rules concerning late payment penalties. I can ask some of my students tomorrow, they might know. But, I guess you would have to re-issue the invoice and recalculate the VAT etc etc...

Thanks all. No cash-flow problem as such, just that it makes a bigger difference to me if a €200 bill isn't paid than it does to, say, Saunalahti. As for sending invoices, most have a dedicated invoicing address so that usually solves the problem. As I said, I don't HAVE a problem with late payments necessarily, just if the situation arises I would like to know where I stand.

Thanks again

[Rosamunda]

I asked (a bookkeeper) and was told that as far as she knows there are no rules, just recommendations (which in her opinion was 11%). I asked where I could find the recommendations and she said on the Suomenpankki website. She also said VAT is not charged on the interest. So if you raise a new invoice I guess you have to calculate the penalty on the veroton amount but then you add it to the invoice total with tax to get a new total.

Services without tax 100
Tax 22
Total incl alv 122
Penalty charge 2
New total 124

HTH!

Penny.

[Rosamunda]

It's here:

The ruling (2002):
http://www.bof.fi/en/suomen_pankki/ajan ... 7_2002.htm

The update (2008):
http://www.bof.fi/en/suomen_pankki/ajan ... 3_2007.htm

PS: the above looks like a ruling to me rather than a recommendation, not sure.

[ajdias]

What is this "usual bla"?

Their letters never address his objections, and at no point did they acknowledge the communications from my friends that he sent through the channels the company states on the letters. In other words, they were just the usual letters that a careless costumer would receive.

They did acknowledge last week, though: after 3 years they called him and told him that he owned them nothing. Funny, the original bill had already been sent to a debt collector and there was another bill from Tele F on the way for some 4 e. Way to keep the chain moving?

[Upphew]

It's here:

The ruling (2002):
http://www.bof.fi/en/suomen_pankki/ajan ... 7_2002.htm

The update (2008):
http://www.bof.fi/en/suomen_pankki/ajan ... 3_2007.htm

PS: the above looks like a ruling to me rather than a recommendation, not sure.

You can always charge _below_ recommendation...

[karel]

As a freelancer I understand your "worries". Most of my customers pay well in time, but if they don't I just send them a pdf of the invoice as a reminder.
I don't have too many really big customers, so my "problem" maybe can't really be compared to yours. But you can ask yourself if it's worth the time and effort to calculate the late intrest and send them another invoice if you're talking about amounts of 200 euros. You're spending more time on that than you get in return for intrest on late payment.

And it depends also a lot on the country you're invoicing to.
I have a few customers in Holland and in Holland the average paying time is 45-60 days. That's quite a bit different than the 14 days in Finland, but it's standard procedure in Holland.
Also, take the 3-8 days for the bill to travel to its destination, then 3-8 banking days for international payments, and you're already two weeks on the way.



What you can do, at least for domestic payments, is to register a membership with Intrum Justitia. I believe it costs 65 euros a year. When someone doesn't pay their bill, they will go and collect it for you.

[EP]

they will go and collect it for you.

Not necessarily, I tried them. And all I got was a letter that said something like this:"The customer has no means, it is no use trying to collect." And the bill was not even small on my scale. It was still markka days, and it was almost 6000 markkas (about 1000 €).