Draft legislation will give small businesses better liquidity

According to a study made by the Ministry of Industry, payment times in the Swedish business sector have increased by three days during the last 10 years. The longer payment periods are stressful for small businesses, who are forced to deal with poorer liquidity.

Under a new draft legislation, companies with at least 500 employees will provide public information about their agreed payment times, actual payment times and late payments. This information must only be provided if the customer has fewer than 250 employees. The expectation is that the possibility of public follow-up on this will make the large companies themselves change their behavior and pay earlier.

The proposal has now been submitted for referral. Among the remitted bodies, there are a number of large Swedish companies and associations in addition to veteran organisations.

The new legislation is proposed to take effect on January 1 2019.