Entrepreneurs/toiminimi - penalty interest on late invoices
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Entrepreneurs/toiminimi - penalty interest on late invoices
Hi all
I've been hunting (with no success so far) for guidelines on charging penalty interest if invoices aren't paid on time. Is there a guideline on what % you can charge if your payment terms are not met as laid out on the invoice (e.g. payment terms 30 days net, late payment will be charged at XX% per overdue (day/week?)
Any help appreciated, cheers
I've been hunting (with no success so far) for guidelines on charging penalty interest if invoices aren't paid on time. Is there a guideline on what % you can charge if your payment terms are not met as laid out on the invoice (e.g. payment terms 30 days net, late payment will be charged at XX% per overdue (day/week?)
Any help appreciated, cheers
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
It depends on the terms and conditions of the contract.
If they include a penalty clause for late payment..the rate will be stated ..
if there is no such clause..then there is no penalty.
So if you have the received the invoice look at the small print ..(usualy on the back).
If it you who sent the invoice..did you include terms and conditions for Late Payment?
If they include a penalty clause for late payment..the rate will be stated ..
if there is no such clause..then there is no penalty.
So if you have the received the invoice look at the small print ..(usualy on the back).
If it you who sent the invoice..did you include terms and conditions for Late Payment?
Last edited by sinikettu on Tue May 13, 2008 10:06 am, edited 1 time in total.
People do not become more irritable as they grow old - they simply stop making the effort to avoid annoying others.
- Hank W.
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Maybe I should open "Hank's KVG Service" first goddamn hit...
http://www.vm.fi/vm/fi/11_rahoitusmarkk ... ulukko.jsp
Basically, its stipulated by the law on interest rates Korkolaki (340/2002) unofficial translation, it fluctuates against the Bank of Finlands base interest, and theres a "set format" you can see in most of your bills you get (a.k.a. "small print") you inform your clients of the terms. Even though "everybody knows" it.
http://www.vm.fi/vm/fi/11_rahoitusmarkk ... ulukko.jsp
Basically, its stipulated by the law on interest rates Korkolaki (340/2002) unofficial translation, it fluctuates against the Bank of Finlands base interest, and theres a "set format" you can see in most of your bills you get (a.k.a. "small print") you inform your clients of the terms. Even though "everybody knows" it.
Cheers, Hank W.
sitting here like a lemon looking for a gin.
sitting here like a lemon looking for a gin.
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
I'm pretty sure there is now an EU standard on this, at least for journalists, but it wouldn't surprise me at all if Finns didn't know/pretended not to know about it.
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
The thing I would say about these penalty interest on late invoices, is that you piss off your customer and they may never come back to you, the best way to do it , would be to send a later like a week after the due date just to remind them about the bill and on that letter you should add the late fee interest , not on the bill. If you have a big company and you do not give a S+&T about losing a few cumtomers here and there ,put it on the bill like all the big firms here in Finland. I do not have any of mine with me now but I always give to weeks and I think it is 5% for late payment , but that has never happened to me.
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
I suppose it depends what kind of company you have. I pay often penalties to Elisa, Saunalahti, insurance companies, and so on. BUT I have never charged penalties myself. Every bill I write says that payment time is 14 days, and the interest on late payement is 11%. Never ever have I even checked if the payment is late, let alone written a new bill with 11% on top. It would just take too much time, and I hate writing bills anyway. And like Richard said: Unless you are a BIG company, it would just be too risky. When one is a freelancer type tiny company (even when OY) your image and reputation are everything. And the chace to piss the customer away for good is just too big. Write a gentle reminder instead. Without interest.guidelines on charging penalty interest if invoices aren't paid on time.
- Hank W.
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Basically if the bill goes unpaid and is such a hefty sum you start collection procedures, then the interest is valid again.
Some companies... used to give 2-5% "cash discount" of bills paid on the spot. In historical Kekkoslovakia.
What pisses me more off is not the companies that send nasty notices - its companies that put their bills to collection so if *they* have a discrepancy in billing and *you* battle with them there is some arsewipe wanting "collection fees" of a bill that didn't exist in the first place.
Some companies... used to give 2-5% "cash discount" of bills paid on the spot. In historical Kekkoslovakia.
What pisses me more off is not the companies that send nasty notices - its companies that put their bills to collection so if *they* have a discrepancy in billing and *you* battle with them there is some arsewipe wanting "collection fees" of a bill that didn't exist in the first place.
Cheers, Hank W.
sitting here like a lemon looking for a gin.
sitting here like a lemon looking for a gin.
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Yes, I remember when we refused to pay up for our kitchen refit and the company said "whatever... your problem... we outsource all our receivables...". In other words, they had probably sold off their debtors at a discount to a credit firm and if we didn't pay up on time we would just get hassled with interest payments from them.
But... isn't there some automagical system with the viite numero on the invoice which means that late payments are automatically debited at the amount + interest???
In my experience (as an auditor in Finland a loooong time ago) everyone paid on time. Finland had the lowest overdue invoice balances of every country I worked in. And from what I understand, speaking to my students today, unpaid invoices are still not an issue.
I don't indicate penalty charges on my invoices as I don't have many "customers" and they all pay up on time. But I did just reduced my payment terms (made them shorter). Simply because I asked around and realised I was being too generous!
But... isn't there some automagical system with the viite numero on the invoice which means that late payments are automatically debited at the amount + interest???
In my experience (as an auditor in Finland a loooong time ago) everyone paid on time. Finland had the lowest overdue invoice balances of every country I worked in. And from what I understand, speaking to my students today, unpaid invoices are still not an issue.
I don't indicate penalty charges on my invoices as I don't have many "customers" and they all pay up on time. But I did just reduced my payment terms (made them shorter). Simply because I asked around and realised I was being too generous!
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
How do you deal with that? A friend of mine has been getting letters from Tele Finland from a service he never bought 4 years ago (long story short the salesperson told him that it would work with Tele2, and that if he did not used it he would not have to pay anything) - it took them 1 year to send the invoice and he has contacted them to have them write off the bill. Every new bill that arrives they just give the usual bla and it seems that now the bill is up to collection. How can he get out of this mess, should he just give up his rights?Hank W. wrote:What pisses me more off is not the companies that send nasty notices - its companies that put their bills to collection so if *they* have a discrepancy in billing and *you* battle with them there is some arsewipe wanting "collection fees" of a bill that didn't exist in the first place.
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
What is this "usual bla"? Because every single time when I have talked with someone who has charged me something that should not be charged, the thing has been cleared up in the phone.Every new bill that arrives they just give the usual bla
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
All the invoices issued by the company I work for have an 11% charge stipulated for overdue payments (term is usually 14 days).
I don't know if this is a norm (although EP states similar) but I do know that we rarely actually charge late payers this ammount.
Makes me think it's just common practice rather than a rule written in stone.
Also, most of our customers are based abroad, so actually making them pay up would probably be an annoyance not worth the effort, and it would also severely reduce the chance of repeat business .
I don't know if this is a norm (although EP states similar) but I do know that we rarely actually charge late payers this ammount.
Makes me think it's just common practice rather than a rule written in stone.
Also, most of our customers are based abroad, so actually making them pay up would probably be an annoyance not worth the effort, and it would also severely reduce the chance of repeat business .
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Well they have found a way to get extra revenue by sending the invoices already a little bit late. If you look at the date on which the invoice has been made (as they say) you mostly see the invoice one week later so there goes already one weekof your two weeks payment time. Nice way to get 11 percent
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Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Well, to clear things up, it's me sending the invoices, for my services, from my business. Yes, I agree that there should be a "reminder" period and it usually can be cleared up with one email or phone call, BUT in the case where payment does drag on, I want a leg to stand on. I don't have the cashflow that lets me constantly wait and wait for payments. A lot of the companies I work for are big, very big. As a freelancer, yes I do have to be careful, but I also should not have to expect to worry about the "damage to my reputation/losing customer" issue simply because of my size.EP wrote:I suppose it depends what kind of company you have. I pay often penalties to Elisa, Saunalahti, insurance companies, and so on. BUT I have never charged penalties myself. Every bill I write says that payment time is 14 days, and the interest on late payement is 11%. Never ever have I even checked if the payment is late, let alone written a new bill with 11% on top. It would just take too much time, and I hate writing bills anyway. And like Richard said: Unless you are a BIG company, it would just be too risky. When one is a freelancer type tiny company (even when OY) your image and reputation are everything. And the chace to piss the customer away for good is just too big. Write a gentle reminder instead. Without interest.guidelines on charging penalty interest if invoices aren't paid on time.
It has never come to actually having to charge the interest, I was really just interested if anyone knew if there was a standard so I can put it into my terms and conditions.
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
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...
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...
Re: Entrepreneurs/toiminimi - penalty interest on late invoices
Do you send the bills to "ostoreskonra" or "ostolaskut" or the person who orderd the job? Sometimes my bills were payed late when I sent them to the person in question. The envelope just got lost in a pile of papers, the type was on vacation, and so on. When I started to write "ostoreskontra" in the adress field, and the persons name only as a "viite", the money started coming in in time.A lot of the companies I work for are big, very big.