Cash Flow 101: How to Survive Your First Year as a Finnish Entrepreneur
Profit is not cash. Learn why profitable businesses go bankrupt, how to handle 'Ennakkovero' surprises, and 3 strategies to get paid faster in Finland.
Aug 27, 2025
Profit is Vanity, Cash is Sanity
There is a famous saying in business: "Revenue is vanity, profit is sanity, but cash is king."
In your first year, you might look at your sales report and see that you "earned" €10,000 in January. You feel rich. But if your clients don't pay you until March, you have €0 in February to pay your rent, your YEL insurance, and your software subscriptions.
This is the #1 reason new businesses fail. They don't run out of customers; they run out of cash.
The Finnish Cash Flow Traps
Running a business in Finland comes with unique cash flow challenges that generic business advice won't tell you about.
1. The "Ennakkovero" (Prepayment Tax) Surprise Unlike being an employee where tax is deducted automatically, entrepreneurs must pay estimated tax (ennakkovero) in advance.
The Trap: You have a great month and spend the money. Then, a bill from Verohallinto arrives demanding thousands of euros for taxes on income you haven't even collected yet.
The Fix: You need a real-time view of your tax liability so you can set that money aside before you spend it.
2. The "Summer Slump" (Heinäkuu) Finland effectively shuts down in July. Decision-makers go to cottages, and accounts payable departments go silent.
The Trap: If you send an invoice in late June, you likely won't get paid until August or September.
The Fix: You need to forecast this "cash gap" months in advance and build a buffer.
3. The "Big Company" Payment Terms Large Finnish corporations often demand 45 to 60-day payment terms from small subcontractors.
The Trap: You do the work today but get paid in two months. Meanwhile, you have to pay your own bills immediately.
Three Steps to Master Your Cash Flow
You cannot control when clients pay, but you can control how you manage the gap.
Step 1: Send Invoices Immediately (Verkkolasku) Don't wait until "admin day" at the end of the month.
Send the invoice the second the job is done.
Always use E-invoicing (Verkkolasku). Finnish data shows that e-invoices are paid an average of 12 days faster than PDF emails because they go straight into the client's approval system.
Step 2: Track Expenses in Real-Time Small costs bleed cash flow dry. That €5 coffee, the monthly software subscription, the parking fee—if you don't track them instantly, you think you have more money than you actually do.
Use a mobile scanner to capture every receipt instantly.
Step 3: Watch the "Runway," Not Just the Profit Stop looking at your bank balance today. Look at what your bank balance will be in 30 days.
Deduct your upcoming rent, YEL, and VAT payments from your current cash. That number is your True Cash.
Continuous Learning Culture
Encourage ongoing training and knowledge sharing to keep up with AI advancements.
Provide access to training and learning resources.
Encourage attendance at industry events and workshops.
How Finctra Acts as Your Cash Flow Co-pilot
We built Finctra specifically to solve this disconnect between "Accounting Profit" and "Real Cash."
Instant E-Invoicing: Create and send Finvoice-compliant bills in seconds from your phone to get paid faster.
Real-Time Tax Estimates: We calculate your estimated VAT accumulation in real-time, so you know exactly how much cash is actually yours and how much belongs to the taxman.
Automated Expense Flow: By snapping receipts instantly, your dashboard shows your true spending today, not a month later when you find the paper receipt.
Don't let a cash gap kill your dream. Start your free trial with Finctra today.
