50 euros for every reminder – The new EU hammer!
This is the European Commission’s new idea.
Strictly speaking, this is a proposal for a Regulation of the European Parliament and of the Council on combating late payment in commercial transactions, which was published on September 12, 2023.
1. the reasons
The European Commission wants to improve the payment behavior of citizens throughout the European Union. At the heart of these plans is a new regulation that appears drastic at first glance: each reminder costs €50 and invoices are automatically due for payment after 30 days. Deviations are prohibited.
At first glance, the reasons for this new regulation are well thought out. In the EU, 18 billion invoices are issued every year, which corresponds to a breathtaking average of more than 500 invoices per second. Yet despite this immense number of invoices, many people struggle to pay their bills on time. In fact, one in four business insolvencies is due to customers not paying their bills on time. For this reason, the European Commission is now taking action to solve this problem.
2. the details
The new regulation stipulates that invoices are automatically due after 30 days without the need for a separate agreement between buyer and seller. This automatic mechanism is intended to ensure that invoices are paid more quickly. In addition, a reminder fee of 50 euros per invoice will be due if it is not paid on time. This amount will be charged automatically and without the need for manual reminders or letters. This new regulation will initially apply to transactions between companies and not between companies and consumers – not yet.
The European Commission is going even further by proposing the creation of a new authority in each EU member state to monitor compliance with these regulations. These authorities are intended to help companies get their money faster and reduce the administrative burden of collecting outstanding debts.
3. the criticism
Criticism of these plans: In its resolution of October 20, 2023, the Federal Council argued that the rigid 30-day deadline is too inflexible and restricts companies in their freedom to do business. There are also fears that the introduction of a new authority will create additional bureaucracy – although bureaucracy in Germany should be reduced.
The European Commission’s plans are currently still in the discussion phase and the member states have the opportunity to submit their concerns and suggestions. It remains to be seen how this regulation will ultimately be implemented and what impact it will have on the business world and consumers. We will follow developments in this matter closely and report any changes or updates to you.
4. what you can do now
This authority does not yet exist and you have to apply for a reminder notice if a customer does not pay your invoice.
However, you must observe the time limits. After three years, your claim always expires on December 31.
So if you still have outstanding invoices and want to prevent them from expiring, you should apply for reminder notices before the end of the year.
If you don’t know how this works, then take a look at our YouTube tutorial on the payment order here: PAYING OFF DEBTS #2 How to do it WITHOUT AN ATTORNEY with a reminder notice tutorial
And if you want to ensure that your services cannot be subsequently revoked, protect yourself now and always send your customers a revocation policy from the outset.
You can find these here: Protect your business: Legally compliant withdrawal policy for your customers
And if you are a customer and have not received a cancellation policy, get your money back now: Get your money back because you did not receive a cancellation policy
