Every company must have a bank account and the necessary means to use it (e.g. a payment card and online banking credentials) in order to operate. A corporate payment account often includes a credit facility. Account types for businesses include payment accounts, credit accounts and interest-bearing accounts. Banks package these accounts as products and often use their own names for them.
Payment account
The payment account is the company’s “basic account”. It is used to handle the company’s outgoing payments, incoming invoice payments, deposits from cash sales and card transactions, and, when needed, cash withdrawals.
Credit account
To cover temporary working capital needs, a credit facility can be linked to the payment account. The bank sets the overdraft limit for the customer, typically subject to an overdraft fee and interest. The amount of credit used may vary on a daily basis. A credit account requires a standard credit decision from the bank and collateral from the customer.
Interest-bearing account
A company account may also bear interest. In this case, the bank pays interest on the funds held in the account based either on the daily balance or the lowest monthly balance. If the company has surplus funds available for a fixed period, it is advisable to request an interest offer from the bank. Investment and savings options for temporary working capital vary between banks, each of which offer different products.
Foreign currency account
Large companies, municipalities and corporate groups often require more complex services, such as group accounts for internal cash management. A group account allows a company to manage the group’s funds through a single account, make internal payments between units and allocate credit facilities to group units where needed. One of SEPA’s goals has been to reduce the need for companies to maintain euro accounts in multiple countries.
Companies may also have accounts in different currencies. Funds in these accounts can be automatically swept into another account at agreed times or when the balance exceeds a set threshold. A company can also manage foreign accounts via a Finnish bank by issuing instructions through the bank to retrieve account information or make payments from its foreign account.
Opening a business account
Regardless of the legal form of the company, the following are usually required to open an account:
- A recent Trade Register extract (issued within the last three months)
- A copy of the minutes of the decision to open the account, detailing who is authorised to use the account and what services are to be opened.
A company can obtain a business ID (y-tunnus) from the Finnish Patent and Registration Office (PRH) or the Tax Administration even before opening a bank account, since payment of share capital is not required to obtain the ID. If the account is opened for the purpose of paying the share capital before the company is registered, the account may only be used once proof of the registration filing has been provided to the bank.
Business IDs are managed in the Business Information System (YTJ), jointly maintained by the Finnish Patent and Registration Office and the Tax Administration.
The LEI (Legal Entity Identifier) is an international identifier for legal entities. A company or organisation needs an LEI code if it trades in listed shares, ETFs or other listed securities or derivatives.
Before deciding on opening an account, the bank must document the company’s business operations in writing. This requirement is based on the Act on Credit Institutions and the Act on Detecting and Preventing Money Laundering and Terrorist Financing.
The Trade Register extract contains the company’s valid registered information
If no extract is available, the bank will require the company’s articles of association and minutes of the constitutive meeting (or the partnership agreement for general and limited partnerships), as well as the board minutes or extracts thereof. The minutes must show the decision to open the account, the authorised person responsible for opening it and the individuals entitled to use the account, including their personal identity numbers. By law, all general partners in a limited partnership have account usage rights, but it is advisable for them to agree among themselves on how those rights will be exercised.
If you open an account before registering your company, you will not yet have a Trade Register extract. In that case, present the following to the bank instead:
- A copy of your company’s start-up notification to the Finnish Patent and Registration Office
- A certificate from the Trade Register showing that the start-up notification has been submitted
Corporate data services
In Finland, invoicing and payment processing for companies – with the exception of smallest businesses – is highly automated. A company’s financial management system generates the payment data from the purchase ledger and sends the payment file to the bank, usually as a data transfer via banking software. Incoming payments are retrieved and automatically matched from the bank statement or transaction list to the sales ledger.
Common standards
Automation is built on common standards. Finland has a long tradition of standardisation, with banks using common standards for payment data, account statements, reference numbers, bank transfer forms, e-invoicing and account numbers. Many of the standards used in Finland are now based on SEPA-wide rules and technical requirements.
SEPA, or the Single Euro Payments Area, was jointly created by European banks, the European Central Bank and the European Commission in 2008. SEPA services include SEPA credit transfers, SEPA direct debits and SEPA cards. In Finland, domestic direct debits have been replaced with e-invoices and direct payments, and basic bank account numbers have been replaced with international bank account numbers (IBAN). SEPA affects payments by businesses, municipalities, retailers, software providers and consumers alike.
SEPA provides harmonised practices and a common standard level for basic payment services, which banks can complement with additional services as they see fit.
European banks and euro area clearing and settlement systems have adopted the ISO 20022 standard. All payment institutions are mandated to transition to the global ISO 20022 standard in international payments in November 2025.
Corporate invoicing and payments
Companies can choose from a wide range of invoicing options and services that help automate routine tasks. These include paper invoices, electronic invoicing, consumer e-invoices, direct payment, SEPA direct debit and payment terminal services.
Invoices typically include a reference number, which allows the company to automatically match incoming payments with the correct invoice and update its ledger. The reference number also contains a check digit that verifies its accuracy already when the payment is initiated.
Paper invoices
In 2022, a total of 111 million paper invoices were sent through email or by post. Using a prefilled bank transfer form on the invoice makes payment easier: the payer can easily find the necessary details on the invoice and send the signed bank transfer to the bank’s payment service. A bill may include a barcode that can be scanned and used to enter payment details instead of typing them in by hand. The barcode may also be presented as a virtual barcode as a series of numbers that can be copied.
E-invoicing and consumer e-invoices
In 2022, nearly 344 million e-invoices were transmitted through banks. E-invoicing allows companies to both send and receive invoices. E-invoices sent to personal customers are referred to as consumer e-invoices. By switching to e-invoicing, companies can streamline their billing process, reduce manual work and save on postage costs. Receiving invoices electronically allows payment data to be automatically transferred into financial management systems and eliminates potential typing errors. This allows companies to automate their accounting processes and archive their invoices electronically.
SEPA direct debit
SEPA direct debit is a service used across the entire SEPA area. It can be a suitable invoicing option for billers with customers in Europe outside Finland. The service can also be purchased from another SEPA country. SEPA direct debit differs significantly from the Finnish direct payment system: the payer gives a mandate directly to the payee, who converts it into electronic format before sending it to the bank. Consumer customers have the right to request and receive a refund of the payment for any reason within eight weeks of the debit.
Payment terminal service
To accept card payments, a company needs a chip-enabled payment terminal and an agreement to accept card payments. The company must enter into an agreement with the acquirer of the card scheme to accept cards as a payment method. The acquirer provides the merchant with the necessary instructions for processing card payments.
Direct payment
Direct payment is intended for recurring bills for customers who do not use online banking. The payer gives their bank a direct payment authorisation, and the bank pays the bills automatically on the due date. The payee – the recipient of the payment – sends the invoice with a note that it will be paid by direct payment, while the invoice details are also sent electronically to the payer’s bank as part of the e-invoice data.
Online commerce
Companies engaged in online commerce have access to a variety of solutions for receiving payments. The range of options varies between banks and service providers.
Choosing a payment method
Several factors influence the choice of payment method, including the level of trust in the business relationship, the operating environment and associated factors. The buyer’s or seller’s bank and country may involve economic or political risks. Geographical distance and cultural differences – such as payment practices and debt collection – can also affect the choice, as securing payment may be a priority. In European transactions, direct payment methods are generally used due to social stability and short distances. The nature of the product being paid for also plays a role: risks are more carefully managed when the amounts are large or when the purchase involves a one-off special item or project.
Foreign trade
In foreign trade, companies often use indirect payment methods rather than direct transfers. These include documentary collections and letters of credit, collectively known as trade finance services. Especially in the early stages of a trading relationship, buyers and sellers may require more secure arrangements than a simple invoice and payment. Indirect payment methods provide both importer and exporter with documentary proof that goods have been shipped and received.
Documentary collection
Documentary collection is a common payment method in international trade when the seller wants an extra safeguard, even if the buyer’s solvency is not in doubt. Under this arrangement, the buyer receives documentary confirmation that the goods are on their way before making payment. This is a common payment method in Mediterranean maritime trade, for example.
Commercial documents are sent from the seller’s bank to the buyer’s bank for collection. The buyer’s bank releases the documents only against payment or acceptance of a payment order. The buyer can only claim the goods upon presentation of these documents. While both banks supervise the process, they do not themselves guarantee payment.
Letter of credit
Letters of credit are used in foreign trade worldwide, especially in Asia and the Middle East. A letter of credit is a secure payment method for both parties, particularly in one-off or project-based deliveries, as its use is governed by international rules and agreements.
With a letter of credit, the seller avoids the risk of buyer default because the buyer’s bank makes the payment against compliant documents. The buyer, in turn, can monitor delivery and demonstrate financial reliability. Both parties’ banks oversee the payment and the transfer of trade documents.
If there are financial or political risks associated with the buyer’s bank or country, the letter of credit can be additionally confirmed by the seller’s bank, which commits to making payment if necessary.
Summary and key terms
In corporate loan negotiations, financial institutions examine a company’s business operations, financial status and collateral, which may include shares, real estate, receivables or machinery. Some organisations that support business activities, such as Finnvera in Finland, may also act as guarantors.
In addition to financing offered by banks and finance companies, businesses may raise funding from venture capital investors or directly from the markets through securities.
General and special guarantees: Collateral used as security for a company’s obligations. A general guarantee covers all existing and future obligations to the creditor, while a special guarantee secures only certain specified obligations.
Revolving credit facility: A financing arrangement where a company can draw down loans in instalments as needed during an agreed period.
Factoring: Financing provided by a finance company with the company’s accounts receivable serving as collateral.
Leasing: A form of financing commonly used for vehicles and machinery. The asset remains the property of the finance company, and the customer pays lease in regular instalments.
Documentary collection: A trade finance instrument that provides the seller with payment security and the buyer with confirmation of shipment. The buyer receives the documents required to claim the goods only after paying the invoice.
Letter of credit: A trade finance instrument used especially for large one-off deliveries. The buyer’s bank acts as the payer, allowing the seller to avoid any credit risk related to the buyer.