Guide

Credit loss risk is managed with three methods: check a new client's background before starting work, ask for an advance payment on big jobs, and split long projects into partial invoices. This way a single unpaid invoice never grows large enough to destabilize your finances. A fourth method is to outsource monitoring: Truster's Maksuvahti tracks whether your invoices are paid and sends reminders to the client on your behalf.

#Background check for a new client

A basic check on a business client takes five minutes and costs nothing. Check in the Business Information System (YTJ) that the company exists, its Business ID (Y-tunnus) is valid, and the details match what the client has told you. At the same time, see who in the company has signing rights: only a person authorized to do so can sign a contract that's binding. Also take a look at the company's website and public visibility: an active, up-to-date presence signals a functioning business.

For bigger assignments, it's worth digging deeper and checking the client's credit history through a commercial credit information service. A credit report will reveal things like payment default entries, which are a strong warning sign. Also listen for quieter red flags: a client who rushes to get started but avoids signing a contract, negotiates unusually aggressively, or mentions that the previous contractor left after a dispute. Even a single clear warning sign is reason enough to request an advance payment or turn the job down.

#Advance payments on big jobs

When an assignment is large or the client is new to you, ask for part of the payment upfront before starting work. An advance payment does two things: it shows the client's ability and willingness to pay before you've put in a single hour of work, and it finances the start of the job. A common practice in many industries is to split payment across, say, project start, a milestone, and delivery.

Asking for an advance isn't a sign of distrust — it's standard business practice, and any client worth working with will understand that. Bring it up naturally as part of your quote: work begins once the starting payment has been made. If a client flatly refuses a reasonable advance on a large assignment, that itself is important information — a client unwilling to pay anything upfront may also be unwilling to pay afterward.

#Spread the risk with partial invoicing

The biggest mistake in a long project is to finish all the work first and invoice everything at once at the end — then the entire receivable hinges on a single payment. Instead, invoice in parts as the work progresses, for example weekly, monthly, or by agreed milestones. Partial invoicing always limits your risk to just the most recent installment and keeps your own cash flow steady throughout the project.

Partial invoicing also works as an early warning system: if the first installment goes unpaid, you can pause the work before the damage grows. Write this right into the contract: work continues once overdue invoices have been paid. Agree on the invoicing schedule in writing, in the quote or contract, so partial invoices don't come as a surprise to the client. Use a reasonably short payment term on invoices, for example 14 days, so that any problem surfaces quickly.

#Maksuvahti and fast pay as your safety net

Once an invoice has gone out, you can outsource the monitoring: Truster's Maksuvahti (€1.99/invoice) tracks whether your invoice gets paid on time and handles reminders for you if payment is late. Prompt, consistent reminders are the most effective way to get a late invoice paid, and Maksuvahti does it without you having to watch due dates yourself or have awkward conversations.

If your own finances can't handle waiting for payment, HetiPalkka (5%/invoice) pays out your pay right after you send the invoice, so the client's payment schedule doesn't disrupt your everyday life. In summary: check a new client through YTJ and, if needed, a credit information service, ask for an advance payment on big jobs, invoice long projects in parts, and let Maksuvahti keep an eye on your invoices. With these methods, the risk of a credit loss stays small and under control.

#Assessing risk with private clients

You can't check a private individual's background the same way you can a company's, so risk is managed through practices instead. For small jobs, a good approach is to agree that payment happens right when the work is finished, so credit risk never really gets a chance to build up. For larger consumer jobs, such as renovations, the same tools that work with business clients apply: a written contract, a reasonable starting payment, and invoicing the work in parts as it progresses. Clear agreements protect both parties here too, and make paying a natural part of how the job unfolds.

Always make sure you have the client's correct contact details: full name, address, and phone number. It sounds obvious, but collecting on an unpaid invoice is nearly impossible if all you know about the client is a first name and phone number. Ask for the details naturally as part of agreeing on the job: I need your name and address for invoicing. A legitimate client will provide them without hesitation, and reluctance to give basic details is itself a warning sign.

#What to do when the warning signs add up

Warning signs don't necessarily mean you should turn a job down, but they do mean you should tighten your terms. A tiered approach works well: the bigger the risk, the bigger the share of the payment you take upfront, and the more frequently you invoice. For the highest-risk clients, you can offer to take the job only if paid entirely upfront: if the client agrees, the risk is gone, and if not, you've likely avoided a credit loss. Remember that you always have the right to decline an assignment.

Scale your risk management to the size of the job. For a small one-off job, it's enough to have the client's contact details in order and to invoice as soon as the work is done. For a large or months-long assignment, use the full toolkit: background check, written contract, advance payment, partial invoicing, and Maksuvahti. This way risk management doesn't slow down small jobs but still protects you where the stakes are high. The most important thing is that no single client or invoice can make or break your finances. Deliberately diversify your client base: when income comes from several clients, one client's payment trouble or the end of a collaboration won't wreck your whole month's finances.