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With an unpaid invoice, you follow a fixed step-by-step plan: first a friendly payment reminder, then a formal demand letter that puts the customer in default, and if that does not help, debt collection. This way, you rarely end up in court and maintain your cash flow.
Step 1: the payment reminder
An unpaid invoice is often simply forgotten. Therefore, start with a friendly payment reminder with a new, short payment term. In many cases, this is sufficient without putting the relationship under pressure.
Step 2: the formal notice (notice of default)
If payment is not received, send a formal demand letter. By doing so, you put the customer in default, set a final deadline, and announce interest and collection costs. Default only occurs with this step, which is necessary to claim interest and costs.
Step 3: interest and collection costs
After the reminder, you are entitled to statutory (commercial) interest and reimbursement of collection costs. Different amounts apply to business customers than to consumers. Pass these on correctly so that the costs of late payment are borne by the debtor.
Step 4: collection or proceedings
If the customer still does not pay after the reminder, hand over the claim for collection, if necessary via the court. Take timely action: the longer you wait, the greater the risk of uncollectibility and the statute of limitations expiring.
Frequently Asked Questions
Can I go straight to court regarding an unpaid invoice?
That is possible, but rarely necessary or advisable. A reminder and a demand for payment resolve most cases at lower costs.
When may I charge interest and costs?
After default, which you initiate with a formal notice. Announce the interest and collection costs therein.
When should I engage a debt collection agency?
If payment remains outstanding after reminders and demands for payment, taking timely action increases the chances of recovery.
Get paid faster?
Our legal experts draft a strong demand letter and handle your debt collection. Establish payment arrangements in your general terms and conditions or schedule a free consultation.
