The maximum payment period for invoices has been legally established

The maximum payment period for invoices has been legally established

Questionable debtors, or defaulter, can create serious financial problems for companies. In the current time of economic crisis it cannot be excluded that companies are declared bankrupt because of the missed liquidity. Because of this, statutory Terms of payment for entrepreneurs have been established.

When do you pay your invoice?

According to debt collection agency Intrum Justitia Dutch companies pay their debts increasingly later. Additionally, the companies that they are in debt to are more tolerant to these late payments. On average companies wait seventy days before they collect their invoices. In The Netherlands, not even half of the invoices are paid within thirty days. The consequence of these late payments is that it takes longer before companies possess liquid means, causing a deteriorating financial position. In combination with the current reluctance of banks to finance companies, this of course has an impact on their activities and investment possibilities. Companies accept the late payments because they do not want to cause their debtors any financial trouble.

The maximum payment period for invoices has been legally established

To improve the payment ethics and increase the stimulus to invest, the European Union has established a guideline (Guideline 2011/7/EU). The consequence of which is the maximum payment period in trade transactions between companies and trade transaction between companies and governments are now legally established. With these maximum payment periods creditors are given more ammunition to fight delayed payments. Before the only mention about the payment period in the law was that it could not be unreasonably long.

Period for B2B

With the alteration it has been established that invoices should be paid within 30 days after receiving the invoice. In the agreement between the companies a longer payment period of 60 days can be arranged. A payment period longer than 60 days is only allowed if it can be proven that it is not disadvantageous for both parties.

Companies and governments

With payments between companies and governments the invoice must be paid 30 days after receiving the invoice. Deterring from this period is virtually impossible.

When can you bill for debt collection costs?

When an enterprise or the government is too late with the payment, the supplier may, without any formal warning, claim a standard fee from the customer. An increasing percentage that is dependent of the invoice amount, with a minimum of €40.- per invoice applies in this. Additionally a legal interest can also be charged.

Minimum payment period

There is no legal minimum payment period. Entrepreneurs should agree on this themselves. This payment period may not be unreasonable. The new regulations are enforced on agreements that are made on or after the 16th of March 2013. Check if the general conditions agree with the new law- and regulation.

Source: based on an article in Het Parool, 19th December 2012.

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