Payment delay or payment defaults on customer invoices

Delayed customer payments or complete payment defaults are very annoying for SMEs. It can lead to own liquidity bottlenecks and puts companies in difficulties. How should one deal with such cases?

Act preventively

Know your customers. Payment delays and defaults occur significantly less frequently with long-standing partners than with new customers. Check new customers in the commercial register to see if they actually exist. For larger orders from new customers, it might be worth ordering a debt enforcement register extract. This gives you an insight into the customer's payment morale.

Seek personal contact

Call your customer and seek a personal conversation. There might be a very simple explanation. A solution can often be found during a phone call. If your customer cannot pay the entire amount immediately, make a payment arrangement and your customer can pay the outstanding amount in several installments.

File for debt enforcement

First, you should officially put your customer in default with a letter. Typically, one to three reminder letters are common. If the payment is still outstanding after that, a debt enforcement request can be submitted to the competent debt enforcement office. The creditor is then served with an order for payment by the debt enforcement office. If the debtor does not contest this within 10 days, the process can be continued and the actual collection procedure can be initiated. Such a procedure is complex and leads to additional costs. Specialized collection agencies offer support in these processes.