What are doubtful trade receivables, and how do I report an unclear purchase invoice?

A doubtful trade receivable is a sales invoice sent by your company that may not be paid, or that is unlikely to be paid in full. If there is something unclear about a purchase invoice or other accounting document, add an explanation directly to the relevant invoice or document.
 

What does a doubtful trade receivable mean?

A trade receivable is an invoice that your company has sent to a customer but that has not yet been paid.

A trade receivable may be doubtful, for example, if:

• your customer is unable to pay, has gone bankrupt or is undergoing corporate restructuring
• collection efforts have been unsuccessful
• the invoice is disputed and payment is unlikely to be received
• the customer’s contact details are no longer known
• there are otherwise reasonable grounds to believe that the invoice will not be paid in full or in part.

An overdue invoice is not automatically a doubtful trade receivable or a bad debt. Each situation is assessed separately.

If an invoice has been paid in part, only the amount that is unlikely to be received is treated as doubtful.
 

How to report a doubtful trade receivable

1. Collect the sales invoices for which payment is uncertain.
2. State how much of the invoices has been paid and how much remains outstanding.
3. Explain why the outstanding amount is unlikely to be paid.
4. Report any collection efforts, bankruptcy, corporate restructuring or dispute related to the invoice.
5. Attach the relevant invoices and any other supporting documents.
6. If the invoice includes VAT, also provide the VAT breakdown.

UKKO.fi will assess the information you provide and determine whether the receivable can be treated as a bad debt in the accounts and how the entry should be made.
 

Report disputes and credit notes related to accounts payable in the financial statements

If you have disputed a purchase invoice already recorded in the accounting records, are expecting a credit note, or there is another uncertainty related to the invoice, please report this when submitting your financial statement materials. This allows the matter to be taken into account when preparing your financial statements.
 

How to report an uncertain accounts payable item

1. Specify which purchase invoice the matter concerns. Include at least the supplier’s name, invoice number, invoice date and amount.
2. Briefly describe the issue. For example, state whether you have made a complaint, are awaiting a credit note, believe the amount is incorrect, or believe the invoice does not belong to your company.
3. Attach any relevant documents, such as your complaint, the supplier’s response, a credit note or other material that clarifies the situation.
4. State whether you have already received the credit note or are still waiting for it. If known, also provide the estimated amount of the credit.
5. Provide the information together with the financial statement materials.
    

Please note

• Do not remove or amend a purchase invoice that has already been recorded in the accounting records if there is an uncertainty related to it. Instead, provide the information and supporting documents together with your financial statement materials.
• If you receive a credit note after the end of the financial year but it relates to a purchase from the financial year that has ended, please report this as part of the financial statement process as well.
• The earlier you provide the information, the better the matter can be taken into account before the financial statements are finalized.
   

If you need help

If you are unsure which details or documents are needed, email a description of the situation, the purchase invoice and any relevant attachments to osakeyhtio@ukko.fi.