Large companies must report their payment terms

As of 1 March 2022, companies with more than 249 employees are obliged to report the payment terms they have with subcontractors. The first reporting to the Swedish Companies Registration Office will take place between July and September 2023.

The obligation to report this information aims to break the trend towards longer and longer payment terms in the business sector, and to create the best possible conditions for smaller Swedish companies to develop and grow.

Information to be provided by companies

• The average agreed payment term.
• The average actual payment term.
• The percentage of invoices paid after the agreed payment term.

Payment terms must be reported separately for subcontractors with:

• 0 – 9 employees
• 10 – 49 employees
• 50 – 249 employees.

If you use reverse factoring, you must report that information separately. This means that you must report an additional nine items if you use reverse factoring for all three size categories of subcontractors.

Three months to report

Around 1,500 large companies are affected by this, and they will have to report to the Swedish Companies Registration Office annually, starting in 2023. They must then report payment terms for 1 July of the previous year through 30 June of the current year. The company must then submit the information by the end of September.

The first reporting is therefore due between 1 July and 30 September 2023, and the payment terms of invoices for the period 1 July 2022 through 30 June 2023 shall be reported.

If the information is not received in time, the Swedish Companies Registration Office can order the company to report its payment terms and at the same time decide that the company must otherwise pay a sum of money (a fine).

Reporting via e-service

The Swedish Companies Registration Office is currently working on developing an e-service where an authorised representative of the company, or a proxy with power of attorney, can report the payment terms. Reporting will not cost anything.

Public information

The information reported by companies is public, and will be available free of charge on our website.

Reverse factoring

Sometimes, companies sign so-called reverse-factoring agreements. The payment term for this type of purchase is the payment term of the buyer, i.e., the large company.

In reverse factoring, the debtor, the large company, is the initiator, because they want longer payment terms, provided the subcontractor agrees. A large company then uses a factoring company to pay the invoice debts to the subcontractors.

A reverse-factoring agreement is signed between the company, the subcontractor and the factoring company. The subcontractor is always paid directly by the bank, while the company pays the bank according to the agreement.