What is a payment reminder? Explanation and use

What is a payment reminder: a message in which you point out to a customer that an invoice has expired and that you still expect payment, usually with a new payment term. It is an informal first step, not yet a notice of default or collection measure. Legally, the reminder primarily serves as proof that you have issued a formal demand and as a stepping stone to default, interest, and collection costs if the customer continues to refuse payment.

The short answer

• A payment reminder states that an invoice has expired and requests payment within a new period.
• It is an informal signal, not a summons and not, in itself, a statutory notice of default.
• For business customers, you may charge statutory commercial interest after the due date (Art. 6:119a BW).
• For consumers, the fourteen-day notice under Article 6:96, paragraphs 5 and 6 of the Dutch Civil Code applies before you may charge collection costs.
• The reminder is the piece of evidence with which you can later substantiate default, interest, and costs.

What exactly is a payment reminder?

A payment reminder is a written message to a customer who has not paid an invoice on time. You reiterate the outstanding invoice, state the amount and the original due date, and provide a new deadline by which you expect payment. The tone is usually neutral and businesslike. The goal is practical: the customer has often simply forgotten about the payment, and a brief reminder resolves this without straining the relationship.

What is important is what a reminder is not. It is not a legal document and does not in itself compel payment. Nor is it automatically a notice of default within the meaning of the law, unless you attach a clear final deadline and the consequences of failure to comply. Therefore, view the reminder as the first step of a staircase: first a friendly request, then a formal demand, and only as the final step, legal collection.

Reminder, formal notice and default

In practice, the concepts are used interchangeably, but legally there are differences. Default is the core: only when the customer is in default does the right to statutory interest and collection costs arise. There are two routes to default.

• Automatic default: if a strict payment deadline has been agreed upon and it expires, default occurs by operation of law (Art. 6:83 sub a BW). Strictly speaking, a separate reminder is then not necessary.
• Default after a formal notice: if there is no fixed deadline, you must first send the customer a written formal notice with a reasonable period to still make the payment (Art. 6:82 BW). Only after that period is the customer in default.

A payment reminder that clearly states a final deadline and the consequences can simultaneously serve as a notice of default. Therefore, it pays to formulate your reminder carefully, even if the tone is still friendly.

Business customer or consumer

The distinction between a business customer and a consumer determines which rules apply. In a commercial agreement between enterprises, you may charge statutory commercial interest after the due date (Art. 6:119a BW). If no payment term has been agreed, a statutory period of thirty days applies. For extrajudicial collection costs, you can refer to the Decree on Compensation for Extrajudicial Collection Costs.

Stricter rules apply to consumers. Before you may charge collection costs, you must first send the consumer a free reminder with a fourteen-day period, the so-called fourteen-day letter (Art. 6:96 paragraphs 5 and 6 of the Dutch Civil Code). That letter must state what the costs will be if payment is not received. If you forget this step, you may not pass on the collection costs, no matter how often you send reminders.

What do you put in a payment reminder?

A useful reminder is short and concrete. The standard components:

• Reference to the invoice: invoice number, amount and original due date.
• New installment: a specific date by which you expect the payment at the latest.
• Payment details: account number and reference, so that payment is easy.
• Consequences of failure to pay: notification of interest and collection costs, for consumers in the form of a fourteen-day letter.
• Contact option: an invitation to respond if there is a reason for the delay.

A practical example: a graphic designer delivers an assignment to a caterer and invoices 800 euros with a payment term of fourteen days. After three weeks, nothing has been received. She sends a polite reminder with a new payment term of seven days. If payment is still not received, a formal demand letter follows, announcing commercial interest and collection costs. In this way, she builds a file that is immediately usable for future collection.

How many reminders do you send?

There is no legally mandated number. In practice, a short series works: a friendly first reminder, a second reminder or demand letter with a strict deadline and notification of costs, followed by transfer to a collection agency or bailiff. For consumers, the fourteen-day letter is the step you must not skip if you wish to recover collection costs. For business clients, what matters most is that you have demonstrably caused default.

Honest recommendation

You do not need a lawyer for an ordinary overdue invoice. You can easily send a proper reminder and, for consumers, a correct fourteen-day notice yourself using a good template. As long as you include the invoice number, a specific deadline, and the consequences of non-payment, your case is in good shape.

Do have someone review the matter when large amounts are involved, a customer disputes the substance of the claim, or a situation where the payment term and interest agreements are unclear. On those points, the precise wording determines whether you can actually collect interest and costs later.

You can read more about the structure of your letter under drafting a payment reminder and about outsourcing under having a payment reminder drafted. You can arrange a ready-made document via the payment reminderpage.

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