Published 2026-09-17 · 9 min
Demand letter example: how to send a correct payment reminder
A customer paying late is annoying; a demand letter that is legally incorrect is expensive. The wrong tone, deadline or recovery costs can lead a court to reduce or reject your claim later. This article explains the difference between a payment reminder and a formal demand letter, what must be included, and gives you ready-to-use templates for both business and consumer debtors.
Reminder or demand letter? The difference that trips people up
Both terms are used interchangeably, but they are two distinct steps in the collections process.
The payment reminder is the friendly first step, usually 3 to 7 days after the due date. The tone assumes an oversight; no costs or legal consequences are mentioned yet.
The demand letter is the formal second step, usually 7 to 14 days later, when the reminder produced nothing. The tone is businesslike and explicit about consequences: statutory interest, recovery costs and, if needed, handover or court proceedings.
The distinction carries legal weight. In most EU countries a consumer debtor must first receive a formal notice with a final, cost-free deadline before recovery costs can be charged.
When is a demand letter required?
For consumers, national law often prescribes a mandatory final notice: in the Netherlands the 14-day letter under article 6:96(6) of the Civil Code, in Germany a Mahnung under § 286 BGB, in France a mise en demeure under article L441-10 of the Commercial Code. Skip it and you generally lose the right to charge recovery costs.
For business debtors the rules are lighter. Under EU Directive 2011/7/EU on late payment, interest and a fixed compensation of at least EUR 40 fall due automatically once the payment term expires, without a reminder. Sending a clear demand letter anyway is still wise: it proves you notified the customer, which strengthens your position in any later procedure.
What a correct demand letter must contain
A letter that is both legally and practically sound always includes:
- Your company details and those of the customer.
- The invoice number and original invoice date.
- The outstanding amount, excluding and including any interest.
- The original due date.
- A clear new payment deadline — for consumers at least 14 days.
- The concrete consequences of non-payment: interest, recovery costs, next steps.
- For consumers: the exact amount of recovery costs under the applicable statutory scale.
- Your payment details: IBAN and ideally a direct payment link.
- Contact details for questions.
Demand letter example: business customer (B2B)
Subject: Formal demand – invoice [invoice number] still outstanding
Dear [name],
On [date] we sent you invoice [invoice number] for EUR [amount], payable by [due date]. To date we have not received payment. We previously sent a reminder on [reminder date].
We urge you to transfer the outstanding amount of EUR [amount] no later than [new date, +7 to 14 days] to account [IBAN], quoting invoice number [invoice number].
If payment is not received within this period, we will charge statutory late payment interest from the original due date, together with the fixed compensation and recovery costs we are entitled to. We also reserve the right to hand the claim over for further recovery.
If you have already paid, please disregard this letter. Any questions about the invoice? Contact us at [phone/email].
Kind regards, [name], [company]
Demand letter example: consumer (final notice)
Subject: Final payment reminder – invoice [invoice number]
Dear [name],
Despite our earlier reminder, we have not received your payment of EUR [amount] for invoice [invoice number], which was due on [date].
We ask you to pay this amount within 14 days of the date of this letter, so no later than [date + 14 days], to account [IBAN], quoting [invoice number].
If we do not receive payment within this period, we will be obliged to charge extrajudicial recovery costs. Based on the statutory scale these amount to EUR [amount, minimum EUR 40].
If you have already transferred the amount, please disregard this letter.
Kind regards, [name], [company]
What a demand letter costs your customer in 2026
Use current statutory rates. Under the EU late payment directive, commercial interest is at least eight percentage points above the ECB reference rate, plus a fixed EUR 40 compensation. National rates differ: in the Netherlands commercial interest is 10.4% per year since 1 July 2026, and consumer interest 4% since 1 January 2026.
Dutch extrajudicial recovery costs follow this statutory scale, a useful benchmark across the EU:
| Part of the principal | Percentage |
|---|---|
| First EUR 2,500 | 15% (minimum EUR 40) |
| Next EUR 2,500 | 10% |
| Next EUR 5,000 | 5% |
| Next EUR 190,000 | 1% |
| Above that | 0.5% (capped at EUR 6,775) |
Common mistakes when sending a demand letter
These five mistakes cost businesses the most money in practice:
- Skipping the mandatory final notice for consumers — you lose the right to recovery costs.
- Threatening handover too early — it damages the relationship without need.
- Applying the wrong interest rate — commercial interest on a consumer invoice, or the other way round.
- Not naming a clear new deadline — “as soon as possible” is not enforceable.
- Forgetting the invoice number — especially with several open invoices.
How Credimigo automates this
Tracking due dates, choosing the right tone per step and calculating interest and recovery costs correctly takes time and invites errors. Credimigo runs that part of your receivables process: from the friendly first reminder to the formal demand letter, with automatic statutory interest and recovery cost calculation, in your customer’s language and tone, across Europe. You remain the creditor — Credimigo is software, not a collection agency. Your first invoice analysis is free.
Frequently asked questions
What is the difference between a payment reminder and a demand letter?
A payment reminder is the first, friendly notice that an invoice is still open. A demand letter is the formal second step stating concrete consequences such as interest and recovery costs.
Do I always need a demand letter before handing over a claim?
For consumers most national laws require a formal final notice first. For business debtors it is not mandatory, but strongly recommended as evidence.
How much in recovery costs can I charge a consumer?
Under the Dutch statutory scale: 15% of the first EUR 2,500 with a EUR 40 minimum, tapering to 0.5%, capped at EUR 6,775. Other member states apply their own scales.
What is the commercial interest rate in 2026?
In the Netherlands 10.4% per year since 1 July 2026. Elsewhere in the EU it is at least eight percentage points above the ECB reference rate.
Can I send a demand letter by email?
Yes, provided you can prove the customer received it. For a mandatory consumer notice, registered post or a read receipt is advisable as additional evidence.
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