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An invoice usually states a due date: the final payment date. If this is missing, a statutory payment term applies. Please note: payment terms between businesses may not simply be too long, and large enterprises may not impose extremely long terms on small suppliers.
The due date determines when payment must be made
The due date is the last day by which your customer must pay the invoice. If a due date is stated, that date applies. If no term is stated and nothing has been agreed upon, a statutory payment term applies within which the customer must pay.
Limits on payment terms between companies
You may agree on a payment term between businesses, but not without limit. In principle, a maximum of sixty days applies; a longer term is only permitted if it is not manifestly unfair to the creditor. Furthermore, large enterprises may not impose a term longer than thirty days on small suppliers (SMEs). An excessively long term is reduced by operation of law.
After the due date: default and interest
If the customer fails to pay on time, default occurs. For business customers, statutory commercial interest often starts accruing automatically after the due date; for consumers, you must first send a proper formal notice (fourteen-day letter) before you may charge collection costs. Therefore, clearly state the due date on your invoice.
Clearly define payment terms
Include a clear payment term in your general terms and conditions and on your invoices that stays within the rules. This way, the customer knows where they stand, and you are in a strong position in the event of late payment. A clear due date is the basis of a smooth collection process.
Frequently Asked Questions
What if there is no due date on the invoice?
In that case, the agreed term applies, or failing that, a statutory payment term within which payment must be made.
Can I agree on any payment term?
Not just like that between companies: in principle a maximum of sixty days, and large enterprises may impose a maximum of thirty days on small suppliers.
When may I charge interest?
After the expiry date, often by operation of law for business customers; for consumers, after a proper fourteen-day notice.
Are your invoicing and terms and conditions in order?
Our legal experts set payment terms in your general terms and conditions and draft a demand letter . View our debt collectionteam or schedule a free consultation.
