With promissory notes being discontinued, the JFTC and SMEA request appropriate payment (payment within 60 days)Paper "pay later" promises are going away. Pay on time!
On September 2, 2026 (Reiwa 8), the Japan Fair Trade Commission, together with the Small and Medium Enterprise Agency, requested appropriate payment across the entire supply chain in light of the discontinuation of promissory notes. Even for transactions outside the scope of the Fair Subcontract Transactions Act (取適法), it asks businesses to shorten payment terms to within 60 days and to increase cash payments.
- January 1, 2026 (Reiwa 8)Fair Subcontract Transactions Act takes effect. Delivering bills for orders from this date is prohibited
- September 2, 2026 (Reiwa 8)JFTC and SMEA request appropriate payment
- September 30, 2026 (Reiwa 8)Final date for issuing bills and checks at many financial institutions
- March 31, 2027 (Reiwa 9)Exchange of bills and checks at electronic clearing houses ends
- April 1, 2027 (Reiwa 9)Payment notice takes effect. Also applies to transactions outside the Act
Key points
- For orders placed on or after the effective date of the Fair Subcontract Transactions Act (January 1, 2026 (Reiwa 8)), delivering a bill as payment is prohibited.
- For many financial institutions, the final date for issuing bills and checks is September 30, 2026 (Reiwa 8). On March 31, 2027 (Reiwa 9), the exchange of bills and checks at electronic clearing houses will end.
- On April 1, 2027 (Reiwa 9), the payment notice under the Antimonopoly Act takes effect and also applies to transactions outside the Fair Subcontract Transactions Act. It prohibits still not paying after 60 days have passed from the date of receipt.
- Even with electronic receivables or batch settlement methods, use is in principle prohibited unless the full amount can be received within 60 days of receipt. For long-term transactions, it also asks for higher advance-payment and interim-payment ratios.
What to do in practice
- List the payment terms and payment methods (bills, electronic receivables, etc.) for each trading partner, and consider whether you can move to cash within 60 days.
- Consult your financial institution early about the impact on cash flow.
The paper promise used between businesses to say "I'll pay later" (a promissory note) will soon stop being usable. The government asks businesses to pay properly within 60 days of receiving the goods.
- 1. DeliverDo the work and deliver the goods
- 2. ReceiptThe other side receives the goods
- 3. Within 60 daysThe payment is made during this time
- 4. Full amount arrivesYou get the full amount with no fees taken off
Points
- The system for exchanging promissory notes ends on March 31, 2027.
- Once 60 days have passed since you received the goods, you must not keep the other side waiting.
- Even if you use a system that turns into cash later, it's a problem if the other side can't get the full amount within 60 days.
What the words mean
- Payment term (サイト)
- The number of days from receiving goods to paying for them.
- Promissory note (約束手形)
- A piece of paper that says "I will pay this amount on this date."
- Japan Fair Trade Commission: Japan Fair Trade Commission: Ensuring Appropriate Payment Across the Entire Supply Chain in Light of the Discontinuation of Promissory Notes
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.