Counteracting excessive payment delays

The amendment to the Law of March 8, 2013, on Counteracting Excessive Delays in Commercial Transactions came into force in early 2020. It aims to reduce payment congestion associated with a significant extension of the deadline for payment of liabilities. The legislation imposes quite a few restrictions related to business cooperation between the supplier and the customer. Currently, after a year of the amended law being in force, we can see more and more areas affected by the new regulations. It’s worth making sure that the company’s internal procedures are ready to meet the requirements. In the event of an audit by the Office of Competition and Consumer Protection, it will allow the necessary data to be obtained efficiently.

The most significant changes are in the following areas:
✓ Limitation of maximum payment terms, particularly for large entrepreneurs where the creditor is an SME business,
✓ Higher interest rates for late payment,
✓ Obligation for the largest companies to submit reports on payment deadlines,
✓ The possibility of using the so-called bad debt relief in PIT and CIT and charging the debtor with compensation for debt recovery costs.

The control of excessive delays falls within the competence of the OCCP. The Office decides to initiate proceedings, which may result in imposing a fine. It’s also possible to set an administrative, financial penalty in a situation where the proceedings are obstructed. Therefore, it’s crucial to provide the authorities with all materials and evidence required during the inspection. Gathering them is not a trivial matter.

A number of areas will be reflected in the financial and accounting system. There are steps that should be planned for every business, regardless of company size. It will be beneficial to analyze current contracts in terms of agreed payment terms. It’s helpful to know the status of trading partners – i.e., whether they are large or small/medium taxpayers. This information can be included in contractor files. Analyze actual payment terms, their compliance with the contract, and regulations.

It’s worth preparing your SAP system to report information on used payment terms. Although practice shows that obtaining reliable data is time-consuming, the analysis results are often surprising and give rise to changes in everyday payment procedures. The key is to develop a method for obtaining this information from the system – for this purpose, you can use a number of standard reports and functionalities in SAP.

The monitoring process (dunning) or the functionality of interest calculation will support you in dealing with excessive payment delays. Setting them up in the SAP system isn’t expensive, and it can streamline the receivables department’s daily operations. It’s also worth being prepared to take advantage of the possibility of compensation or relief for bad debts. In this case, designing the accounting process can be done with little effort.

It’s worth being aware of how the SAP system supports users in compliance within standard functionalities, without the need for costly customization or the creation of custom solutions.