What do I do?

Company’s financial difficulties and their prevention

To get the best help for your situation, first answer the questions on the guide's start page.

Checklist for a company’s financial difficulties

What to do when you want to improve your company’s financial situation or cope with financial difficulties.

Learn about your company's finances

Financial difficulties can be caused either by external reasons or reasons internal to the company. To get up to date, you can use basic calculations to figure out your company’s financial situation:

the weekly cash flow statement shows how much money your company receives and how much money goes out
the balance sheet shows what your company’s assets and capital are at a certain point in time
the income statement shows, for example, the income of the current financial year, expenses deducted in the accounts and the profit or loss for monitoring the prepaid tax.

Business impacts of payment difficulties

If financial difficulties become prolonged, your company may run into payment difficulties, face a financial crisis or even become insolvent:

Payment difficulties can be overcome when you take action as early as possible.
The clearest sign of a financial crisis is that your company’s revenue does not always cover the expenses, and your funds decrease.
Insolvency means that your company is unable to make its payments and pay its debts.

If a company is insolvent or threatened by insolvency, the management of the company has specific statutory obligations. Liability for debts is also based on legislation.

Ask for help if necessary

You can get help with your company’s finances from your accountant, the Yrittäjän talousapu counselling service, your regional business development company and your local Finnish Enterprise agency and from Financial and debt counselling.

If you are concerned about your household finances, you can find support from Financial and debt counselling, the Debt Line telephone service and the Ask about money chat. Also find out whether you are eligible for Kela subsidies, unemployment benefits, small loans or social lending.

For help with your personal coping, you can for example reach out to occupational health care, the health care and social services of your wellbeing services county and the services of Mieli ry. Also remember that talking to loved ones and other entrepreneurs can help you cope.

Take care of statutory obligations

Always remember to

pay employees’ wages and bonuses on time
declare and pay your company’s taxes and employer contributions
report your earnings to the earnings-related pension company and pay your entrepreneur’s pension contribution
ensure that your company’s accounting is lawfully arranged.

If you do not make statutory payments, they will go to enforcement and the company may receive a payment default entry.

Agree on extensions for invoices

Contact the creditor immediately if you cannot pay an invoice by the due date.

Negotiate a new payment schedule by changing the due date or by other means. If changing the due date does not help to make the payment on time, request a longer-term payment arrangement.

This way, you can avoid invoices going to collections and even enforcement, alongside payment default entries.

Investigate your possibilities for arranging debts

If your company has accumulated so much debt that it is no longer possible to pay them by negotiating with the creditors, investigate your possibilities for

consolidating debts with an arrangement loan
a debt arrangement for a private trader
corporate debt restructuring.

Prevent financial difficulties

The most important thing in preventing financial difficulties is keeping your company’s finances in balance and taking care of statutory obligations. This is possible when you

monitor your company’s financial situation regularly and keep accounts up to date
take corrective action as soon as you notice alarming changes
continually plan how you can improve profitability, i.e. reduce expenditure and increase revenue
take care of statutory notifications, insurance policies and fees.

Prepare for financial risks

In business, you will inevitably face situations different from normal that complicate both your and your company’s activities.

How to prepare for financial risks:

Prepare for unexpected situations with an adequate buffer fund.
Have personal savings so that you are prepared if your own household’s costs increase.
Prepare a contingency plan for your company for disruptions and crises.
Keep your company’s insurance policies in order.

Make a plan for how

you can keep your company operational despite your absence
you can make it easier to resolve any disagreements
to handle the future of your company after something like divorce
you would like the company to continue after you.

Develop your business

How to develop your company’s business:

Compare your financial figures with your competitors and find out what the possible differences are.
Update your business plan if necessary.
Focus on customer acquisition and increasing sales.
Prepare a financing plan for your company and monitor the implementation of the budget.
Invest and apply for business subsidies.

If necessary, ask for help from sources such as the national Enterprise Finland advisory service, local or regional business development services and business advisory services, Business Mentors or an entrepreneur organisation.

Take your employees into account

In terms of performance and wellbeing, it is important that the work has been organised and responsibilities allocated appropriately. You should assess this together with your employees so that they know what is happening and what is expected of them. Also openly inform employees about the financial situation.

If your financial difficulties lead to a situation where you need to rethink the number of personnel, the organisation of work and work tasks,

remember to conduct change negotiations if the company falls within the scope of the Act on Co-operation within Undertakings
ask employment services for advice in situations of personnel-related change.