Press release: The Swedish Electronics industry association gives the thumbs up to the new bill on 30-day payment terms

Last year, the government submitted a bill entitled ”Faster Payments” on payment terms, which received strong criticism from many quarters for being too weak in its wording on payment times. The Swedish Electronics industry association was one of those who criticized the bill on this point. The government was tasked by the Riksdag to revise the bill and strengthen the wording and state that 30 days should apply in the business sector.

The Swedish Electronics industry organization welcomes the clarity in the new bill and also emphasizes the importance of designing transitional rules for agreements already entered into that do not comply with the new rules.

The Swedish Electronics industry association is positive about the development and improvement of regulations to promote faster payments. We viewed the government's previous proposal with concern as it risked extending payment times, i.e. having the opposite effect than intended. The new bill is clear that 30 days will apply from the time the claim is presented.

It is both inappropriate and unacceptable for suppliers to become banks. It is of great importance that the focus is placed on the supplier's real role: to deliver the right service and product at the right time at the right price. Let them concentrate on this. The customer companies, often the large companies – which is particularly serious – often demand long payment periods from the suppliers, who are often smaller companies.

All stakeholders, both customers and suppliers, have every reason to work together to ensure sound business with low credit risks. With long payment times, we risk a domino effect that can have the undesirable effect of good companies with excellent products being dragged down by someone else's failure. In the long run, everyone loses out.
Short payment periods strengthen companies' liquidity and reduce credit risks with economic consequences of a "domino model" in the trade chain. Longer credit periods increase the risk of not getting paid due to the buyer's insolvency. Suppliers were very clearly affected by the change in the preferential rights rules, which was introduced on January 1, 2009, which significantly reduced the possibility of dividends in the event of the buyer's bankruptcy.

From the perspective of society as a whole, it is more interesting to discuss shorter payment times and thus reduced liquidity problems. Extended payment times risk becoming industry practice at all levels, which in the long run leads to increased financial risk for all business partners, with locked-up capital, liquidity problems and unnecessary bankruptcies as a result.

Lena Norder
CEO, Swedish Electronics Industry Association
Klara Norra Kyrkogata 31, 104 22 Stockholm
Tel. 08 508 938 15, 0765 474815
www.svenskelektronik.se

Press release