Instructions
for the beneficiary
Was your company's funding application approved? This page contains instructions on how to start, monitor and report on your project.
1) Starting the project
- Business Finland pays the advance payment.
- Arrange accounting in a way that enables the project costs to be itemized.
- Check from the terms and conditions of funding which costs are eligible for the project.
2) Changes during the project
Notify Business Finland of any changes to the project.
3) When the project ends, fill in the final report
- Compete the final report in the Online Service within four months from the ends of the project.
- Business Finland will pay the funding on the basis of the final report.
You can make enquiries regarding your project from your contact person.
You can find the contact details of the contact person for your project in Business Finland's online services. Log in to the online service, select your organization and the project below it. You can find the contact persons for the project in under the project section.
1) Starting the project
Business Finland pays the advance payment
Business Finland will pay an advance payment of 70% when the company has approved the funding decision. An advance payment already paid may be clawed back if the terms and conditions of funding are not followed. By accepting our funding decision in our Online Service, you also agree to our funding terms and conditions.
Arrange accounting properly
Project costs must be accounted right from the start of the project. You must be able itemize the project costs and prove their connection to accounting.
Only costs that have arisen during the project may be accepted for the project. A project may start earlier than the moment the funding application was sent from the Online Service. Therefore, a fee paid for creating the application is not an acceptable cost for the project.
All costs declared for projects must be paid for by the time they are reported to Business Finland.
Eligible costs for the project
Salaries
- A salary paid for a person is an eligible project cost in the proportion the person has worked in the project.
- The report must compare the actual work effort to the estimate in the project plan and report any deviations.
Indirect personnel costs
- The percentage of salaries referred to in the funding decision is an eligible indirect personnel cost.
- Indirect personnel costs include social security costs as well as other employment costs, such as recruitment costs, personnel training and fringe benefits.
- The persons must belong to the scope of Finnish social security.
Purchased services
- Expert services in accordance with the project plan are considered eligible purchased services.
- Purchased services are approved without VAT.
- If the value of the procurement is at least EUR 60,000, the beneficiary is subject to the acts on public procurement.
- The only eligible purchases from an associated company are purchases with a group. For a more detailed definition, see point 7.4 of our funding terms and conditions.
Other costs
- The percentage of the sum of salaries and purchased services stated in the funding decision is an eligible cost.
- Other costs are not reported to Business Finland, nor do they need to be included in the beneficiary's project accounting.
- Other costs include overhead, travel, material and equipment costs, as well as rents and purchase of machinery and equipment, machinery and equipment depreciations and rental costs (incl. cloud services).
Learn more about the terms and conditions of funding
2) Changes during the project
If you notice during the project that your company cannot execute the project in accordance with the original plan, submit a change application for the project in the Online Service:
- Change to the project schedule (a change application is not needed if the project is extended by a maximum of 4 months or ends earlier than anticipated).
- Significant changes to the cost estimate or execution plan (a change application is not needed for a change between cost categories that does not exceed 20% of the cost estimate)
- Replacement of the accountable project leader
- Change to the funding plan
Report minor changes to Business Finland's record office:
- The bank account number changes Send the template signed by an authorized signatory of the organization.
- The project's contact person or the cost statement contact person changes
Learn more about the terms and conditions of funding
3) When the project ends
Complete the report in the Online service
Complete the final report in Business Finland's Online Service within 4 months from the end of the project period. You can familiarize yourself with the questions that you will need to answer in the report in advance and return to complete the template at a later date. You can complete the report once you finish your project, even if your project period hasn't ended yet. Your project must have finished and all your costs must have been paid before you submit your final report to Business Finland.
The last page of the template before you submit your report will ask for the accountable project leader's confirmation that
- the funding terms and conditions have been complied with and
- the funding was used as outlined in the project plan.
The cost statement contact person (a liaison officer from your in-house accounts department or a representative of your accounting firm, if you have outsourced your accounts) will need to provide a separate declaration to confirm that
- the declared costs have been entered into the company's accounts,
- no value-added tax has been added to the costs, and
- the costs have been paid.
The declaration cannot be given by the company's CEO or the accountable project leader. The report can only be submitted by the accountable project leader or an authorized signatory of the organization.
Submit your report through our Online Services
Upper limit for other costs raised to 30 per cent
If you end up spending less on salaries and purchased services than the amount estimated in your funding decision, you can declare up to 30% of your other costs in your final report.
Raising the percentage of other costs cannot raise your total project costs above the total budget approved in your award decision. The amount of assistance cannot exceed your total business development costs.
Funding cannot be paid and advances may need to be recovered if
- the company has failed to file tax returns
- the company has outstanding tax debts for which no payment plan has been arranged with the Finnish Tax Administration
- the company has not been entered into the Finnish Tax Administration's Prepayment Register
Less funding than the amount stated in the funding decision may be paid if
- the project ends up costing less than estimated
- the company declares costs that Business Finland cannot cover (e.g. operational costs, investments)
- the company declares costs that were not incurred during the project
- the company declares costs for which it has received assistance the terms and conditions of which forbid other simultaneous public funding (e.g. government contribution to wages)
- the company has failed to put contracts for purchased services valued at more than EUR 60,000 out to tender as required under the Act on Public Contracts
- the company has purchased services from associated companies that do not belong to the same group of undertakings as the beneficiary (for more information, see point 7.4 of the funding terms and conditions)
- the company has paid wages inconsistently with the company's normal remuneration policy
Business Finland reserves the right to exchange information concerning beneficiaries with other authorities, such as the Finnish Tax Administration.
Business Finland pays the remaining portion of the funding
The remaining 30% of the funding will be paid after the final report has been approved. Paying the funding is subject to the company completing the final report and that the project has been implemented in accordance with the plan and in compliance with the funding decision and the terms and conditions of funding.
Funding cannot be paid if the company has outstanding tax debt that does not have a tax payment arrangement in place or for which a tax payment arrangement has not been applied for. In addition the company must not have neglected to file any tax returns. Business Finland may exchange information regarding the funding beneficiary with Finnish Tax Administration, for example.
Keep documentation for any follow-up audit
Keep documentation related to the project for 10 years from the last instalment of the funding payment.
Business Finland will carry out more detailed audits on some projects retrospectively. The projects subject to a follow-up audit are selected randomly or based on a risk assessment or suspected misuse. In the event of any non-compliance or misuse of funding, Business Finland has the right to reclaim the funding either partially or in full with interest.
Changes to the project
Q: I would like to cancel the application. What should I do?
A: You can cancel the application before a decision is made by emailing Business Finland's record office at kirjaamo@businessfinland.fi.
In the subject field, enter: "Cancelation of application xxxx/31/2020 Company name" (= reference number and name of the company).
Enter the following in the message field:
We are canceling our application.
Best regards, N.N.
Q: I would like to repay my funding. What should I do?
A: If you no longer wish to proceed with your project and want to repay any advances that you may have received, you will need to email our record office at kirjaamo@businessfinland.fi. Please include the project reference number and your company's name in your email. We will send you a payment decision notice, including the account number and instructions for returning the payment.
Q: What should I do if not all of the planned costs have been incurred?
A: Report all of the costs arising on the project. Funding is paid to cover a percentage of the eligible costs, as stated on the funding decision. If the actual costs are lower than the cost estimate, you can increase the proportion of other costs stated in the final report to 30 percent instead of the 20 percent stated on the decision. Other costs are a percentage of the total sum of employee remuneration and the costs of purchased services.
Q: Do I need to submit a notice of change if not all of the estimated costs have been incurred?
A: All of the actual costs arising on the project should be reported. If the actual costs in each cost category differ from the total costs by more than 20 percent, the company must submit a change application. No change application is required for changes within cost categories if the magnitude of the change is no more than 20 percent of the cost estimate for the project. If the project is executed using the company's own resources and no costs of purchased services are declared, the change in employee remuneration costs can be no more than 20 percent of the total costs. If the total costs are EUR 12,500, the change may be no more than EUR 2,500.
Accounting and reporting
Q: How should project accounting be organized?
A: Business Finland does not specify how the project accounting should be organized. The guidelines in the funding terms and conditions are: "The beneficiary must arrange its accounting so that the costs arising from the project can be itemized and their connection with the accounting and cost declarations verified." As such, it is sufficient to use a method such as cost tracking on an Excel spreadsheet, providing that this fulfills the condition. If the project is expected to incur substantial costs, it is a good idea to set up a separate cost center for the project. This improves the reliability of project accounting, and the declared costs are easier to find in the event of an audit or similar situation.
Q: Does the project need to be audited?
A: No auditing is required. It is sufficient for the contact person responsible for declaring costs to affirm that the project accounting and costs conform to the terms and conditions. Such an affirmation can be made by a member of the company's financial management or accounting firm.
Q: Do the project costs need to be approved by an auditor accredited by the Finnish Patent and Registration Office?
A: No. The company's own financial management personnel or a party such as a book-keeper at the company's accounting firm can confirm the costs to Business Finland during the reporting phase.
Q: Should the project costs be paid during the term of the project?
A: Invoices allocated to the project may be paid after the project ends but before the final report is submitted.
Q: Should grants be recognized on the balance sheet and unwound from there, or should they be recognized through profit or loss?
A: Business Finland does not comment on the company's accounting practices. The customer should operate in accordance with the Accounting Act and good accounting practice.
Q: Is the price of programming work (outsourced or in-house) an eligible cost?
A: If the project plan includes programming work, it is an eligible cost.
Q: Can the report be updated retrospectively?
A: The report can be supplemented before it has been submitted on the Online Service. Before Business Finland has begun processing the report, supplementary information related to the report can be submitted by secure email. The message must state the name of the beneficiary and the project reference number.
Q: Is financial support taxable?
A: According to the Tax Administration's guidelines, financial support and grants issued to cover business expenditure are taxable income. In other words, tax is payable by the company or entrepreneur (Act on the Taxation of Business Income (ATBI), section 4). Support or grants should be recognized in the company's accounts.
Under accrual-based taxation, support or grants are classed as income in the tax year during which they are received in cash, as a receivable, or as a monetary benefit of any other form (ATBI, section 19). As a rule, general support and grants received by companies should be allocated according to the date of the support decision. Targeted coronavirus grants that depend on the realization of costs should be allocated at the same rate at which costs are incurred.
Q: Does the financial support include value added tax?
A: No. As a rule, the costs declared to Business Finland should also be reported without value added tax.
Salaries
Q: Should the salaries paid to the project personnel be booked under a separate cost center? Should the salaries be itemized by person?
A: No hourly working time monitoring for the project is required, but the beneficiary must be able to demonstrate who has worked for the project and what total salaries subject to withholding tax were paid to these people during the project.
Q: If the company has also received a pay subsidy at the same time, does this affect the funding?
A: Yes. If funding has already been allocated to a cost item and the terms and conditions of the funding prohibit the receipt of other forms of public funding (pay subsidies are one example of this), Business Finland's funding cannot be allocated to the item in question.
Q: If salaries are paid once per month, and they must be paid during the reporting phase, is it necessary to wait until the end of the month?
A: Yes. All of the costs must have been paid before you submit your final report to Business Finland.
Q: What is the method for demonstrating the number of hours spent by employees on the project? Does the company need to track employees' working time?
A: There is no need to track employees' working time.
Q: Are the salaries of the management, owners, and family members eligible?
A: They are eligible costs if they are directly allocated to the execution of the project.
Indirect personnel costs
Q: Are voluntary pension contributions eligible as indirect personnel costs?
A: Only statutory pension contributions are eligible; voluntary contributions are not. Indirect personnel costs include items such as the costs of midweek public holidays, pay during vacations and sick leave, holiday bonuses, social security costs, and other labor costs, such as recruitment costs, employee training, fringe benefits, workwear, and protective clothing.
Q: If any indirect personnel costs are unused, can they be allocated to different cost centers?
A: Indirect personnel costs may account for no more than 30 percent of the salary costs. If indirect personnel costs are not accrued in accordance with the cost estimate, they cannot be declared to Business Finland. They may occur if salaries paid to persons coming from abroad to work in Finland or persons working abroad are allocated to the project.
Purchased services
Q: What is a 'purchase from an associated company'?
A: A purchase from an associated company is a transaction in which the beneficiary purchases goods or services from an associated company. Purchases from associated companies are only permitted for inclusion in de minimis funding in intra-group transactions; other purchases from associated companies are ineligible.
Definition of an associated company: Companies are considered to be associated companies if at least 20 percent of one company's share capital or corresponding equity is directly or indirectly owned or controlled by the other company. Business Finland may also consider companies to be associated if one company has a controlling interest in the other company or can otherwise influence where the other company makes its purchases. Such a situation may arise when the companies have a common Board member, accountable person, family member, employee, and/or funder.
Q: Are purchases from associated companies, i.e. related parties, eligible?
A: Purchases from associated companies will not be accepted. Purchases from companies in the same group are OK.
Q: Is it necessary to purchase the services needed for the project from a registered service provider (as with the innovation voucher)?
A: The service provider can be selected freely.
Q: Can services be purchased from foreign companies?
A: Purchases made in the European internal market are considered equivalent to purchases from Finnish companies. The services to be purchased from Group companies based abroad must be stated in the special terms and conditions to the funding decision.
Q: How can expert services be included in Business Finland's funding for disruptive circumstances?
A: The funding can be granted for purchasing expert service if the services are stated in the project plan, incurred during the term of the project, and entered into the company's accounts. The project may begin once Business Finland has received an application from the company containing sufficient information to enable the application to be processed. Business Finland does not grant funding for costs incurred before the project begins, so items such as a consultant's fees related to submitting the application are not eligible.
Q: Are the costs associated with preparing the application and reporting eligible?
A: No. Under Business Finland's de minimis funding terms and conditions, only the costs incurred during the project term are eligible. The costs associated with preparing the application are incurred before the project phase begins. The costs associated with project reporting are general costs, which are included in other costs.
Q: Should purchases be declared with value added tax or including value added tax?
A: The costs of purchased services are reported without value added tax.
Other costs
Q: What are 'other costs'? Which costs do they cover?
A: Other costs include overheads, travel, material, and equipment costs, as well as rents for business premises, and purchases, depreciation, and rental costs of machinery and equipment (including cloud services). Costs are not reported to Business Finland, nor do they need to be included in the beneficiary's project accounting.
Q: What does it mean that other costs do not need to be reported?
A: Other costs do not need to be included in the project accounting, and they do not need to be itemized on the final report.
Q: What does it mean that the upper limit for other costs has been increased to 30 percent?
A: If you end up spending less on wages and purchased services than the amount estimated in your funding decision, you can declare up to 30 percent of your other costs in your final report. Example calculation:
| Original cost estimate | Costs stated on the final report | |
| Salaries | 6 000 | 5 000 |
| Indirect personnel costs | 1 800 | 1 500 |
| Purchased services | 2 917 | 3 000 |
| Other costs | 1 738 (20 %) | 2 400 (30 %) |
| Total costs | 12 500 | 11 900 |
| Maximum funding | 10 000 | 9 520 |