Published 2026-08-25 · 8 min
Payment term expired: what you are legally allowed to do
Once the payment term on your invoice has passed and the money has not arrived, you are not powerless. Under the EU Late Payment Directive (2011/7/EU) and its national implementations, a creditor may charge statutory late payment interest from the day after the due date, claim at least EUR 40 in recovery costs without proving any damage, and in many cases suspend further deliveries or services until the invoice is settled. This article explains what is allowed, in what order to act, and how to stop it happening every month.
When exactly has the payment term expired?
The payment term expires the moment the due date on your invoice passes without payment. If no term was agreed, EU rules set a default of 30 calendar days after the invoice (or receipt of goods or services). Between businesses a longer term may be agreed, but a term beyond 60 days is only valid if it is expressly agreed and not grossly unfair to the creditor. Public authorities are in principle limited to 30 days.
Once the term expires, your customer is normally in default automatically. Where a fixed due date is clearly agreed, no separate notice of default is required. Where no hard date exists, send a written demand first, giving a reasonable extra period — 14 days is the common standard.
What can you charge once the term has expired?
Two entitlements arise automatically. You do not have to prove any loss.
1. Statutory late payment interest. In B2B and business-to-government transactions the rate is the ECB reference rate plus at least eight percentage points, set nationally and usually revised twice a year (in the Netherlands the statutory commercial rate is 10.4%; for consumer transactions the lower statutory rate of 4% applies). Interest accrues per calendar day from the day after the due date until payment in full.
2. Recovery costs. You are entitled to a fixed minimum of EUR 40 in compensation for recovery costs, plus reasonable additional costs. Several member states add a statutory sliding scale on top; the Dutch scale is a good reference point:
| 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% |
The Dutch scale caps at EUR 6,775 per claim. Watch the consumer difference: with a private customer you must first send a formal 14-day letter before recovery costs become due. With a business customer you may charge straight away — though a friendly reminder first usually gets you paid faster than an ambush.
3. Suspending your own performance. On a running contract — a subscription, ongoing services or follow-up deliveries — you may in many cases suspend performance until the outstanding invoice is settled, provided this is proportionate to the amount and you communicated it clearly in advance.
Business customer or consumer: the difference matters
The entitlements exist in both cases, but the rules differ:
- Business customer (B2B): higher statutory interest, recovery costs immediately, no mandatory pre-notice in most jurisdictions.
- Consumer (B2C): lower statutory interest, a mandatory formal notice period before recovery costs, and consumer protection rules you cannot contract out of — not even in your general terms.
Step-by-step: from expired term to paid invoice
Keep the sequence. Escalating too fast costs you the customer more often than it earns you the money.
- Day 1 after the due date: send a friendly payment reminder. Most invoices are simply forgotten.
- After 7–14 days: send a second, more formal reminder and state that interest is now running (for consumers: this is the moment for the mandatory formal notice).
- After 14–30 days: send a final demand with a hard deadline, the exact interest and cost amounts, and the next steps you will take.
- No response: start your own recovery track or instruct a collection agency or bailiff.
- Still unpaid: consider court proceedings or, for an undisputed claim, a European Order for Payment.
For a detailed walkthrough of every stage, read accounts receivable management versus debt collection.
What if the customer keeps refusing to pay?
When reminders and demands lead nowhere, you have three routes: continue recovering yourself, instruct a collection agency, or go to court. Self-recovery is the fastest and cheapest route for most businesses, especially when reminders, interest and cost calculations and file build-up run automatically. You keep ownership of the customer relationship and pay no percentage of your claim to a third party. See also late payment interest.
How do you stop this happening every month?
Most businesses do not lose money to unwilling customers — they lose it to time: reminding too late, calculating incorrectly, or forgetting altogether. Credimigo automates exactly that part of accounts receivable: reminding on schedule, calculating the correct statutory interest and recovery costs per country, and building a complete, legally grounded file so you never have to work out whether you are allowed to charge something. You stay in the self-recovery role — Credimigo is not a collection agency; you keep control.
Frequently asked questions
Can I charge interest as soon as the payment term expires?
Yes. For a business customer with a clear due date on the invoice, default arises automatically and statutory late payment interest runs from the following day. The same principle applies to consumers, but at the lower consumer rate.
Do I need a collection agency before I can charge interest or costs?
No. As a business you may charge statutory interest and recovery costs yourself, without involving a collection agency. This is called self-recovery.
How many days after the invoice date may I set as the payment term?
The EU default is 30 days. Between businesses a longer term may be agreed, but beyond 60 days it must be expressly agreed and not grossly unfair to the creditor.
Can I claim interest and recovery costs at the same time?
Yes. They are two separate statutory entitlements and may both be claimed alongside the principal amount.
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