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If a customer fails to pay on time, you may charge collection costs to cover the costs of collection. The amount is legally standardized via a sliding scale. For consumers, you must first send a proper fourteen-day notice before you may charge these costs.
Why collection costs?
An unpaid invoice costs you money: you have to go to the trouble of collecting, your cash flow is disrupted, and you miss out on interest on money that does not come in. That is why you are allowed to charge collection costs for late payment — a fee for the out-of-court collection costs.
What is permitted: the statutory scale
The amount of collection costs is regulated by law (the Extrajudicial Collection Costs Standardization Act). This uses a sliding scale: a percentage of the outstanding principal amount that decreases as the amount increases, with a statutory minimum. As a result, the costs are proportionate to the claim. If you engage a collection agency or lawyer, those costs will in principle fall within this standardization.
What is required: for consumers, first the fourteen-day letter
For consumers, you may only charge collection costs after sending a proper reminder with a payment term of fourteen days and a notification of the collection costs (the fourteen-day letter). If you fail to send this or send it incorrectly, you lose your right to the collection costs. The situation is more flexible for business customers, and you may deviate from this contractually.
Pay attention to VAT and correct calculation
If you are not subject to VAT and cannot reclaim the VAT, you may pass it on to the collection costs under certain conditions. Apply the scale correctly and clearly state the costs. A correct calculation and procedure prevent disputes and strengthen your position.
Frequently Asked Questions
Am I allowed to charge collection costs for late payment?
Yes, to cover collection costs. The amount is legally standardized via a sliding scale with a minimum amount.
Do I need to send a reminder first?
For consumers, however, this is not the case: a proper fourteen-day notice is required before you may charge collection costs. For businesses, the situation is more flexible.
Do the costs of a collection agency fall under this?
In principle, yes: they fall within the statutory regulations for collection costs.
Get your invoices collected?
Our legal experts draft a proper demand letter and handle your debt collection. Establish payment arrangements in your general terms and conditions or schedule a free consultation.
