Get your customers to pay on time

It is normal to want to build a good relationship with your customers. But you also want to be paid on time. How do you balance this? Learn more about how to make sure your customers pay on time.

Getting customers to pay your invoices on time is an essential part of good debtor management. How do you do that? Use the checklist in the article ‘How to get from quotation to payment’ and follow the tips below.

1. Find out more about your customers

Check the credit rating and payment history of your customers before you sign a contract. Are your clients mainly other businesses? Credit rating agencies, such as Dun & Bradstreet and Graydon, provide credit information about businesses. You can also use the KVK Business Register (in Dutch) as a research tool. For example, search for the business and check if there has been a bankruptcy or suspension of payments. If not, you can be confident you are doing business with someone who has no financial problems.

If you mainly work for consumers, you can ask for a personal credit check (‘eigen inzage’) from the Bureau Krediet Registratie (BKR). The BKR register does not contain tax debts. But its details do give you an impression of how the customer is doing financially. And if any problems may prevent your customer from paying your invoice.

2. Agree on payment term

Always agree on the payment term in advance. The payment term is the period within which your customer must pay the total amount of the invoice. A payment term of 30 days is normal for companies. The maximum legal payment term is 60 days for companies and 30 days for government organisations. Mention the payment term in your general terms and conditions, in the contract, and on your final invoice after delivery.

Large companies must pay SMEs within 30 days

Since 1 July 2022, large companies must pay invoices from SMEs within a maximum of 30 days. The old maximum payment term was 60 days. This rule is meant to help smaller businesses with their cashflow. These companies now spend less time waiting on outstanding invoices.

Use these 2 tips if your client is a large company:

• Select which of your customers must pay your invoices within 30 days, because they are considered a ‘large company’. For example, large companies meet 2 of the following 3 characteristics:
  • They employ at least 250 people;
  • They have more than 40 million euros of net turnover;
  • Or their balance sheet total is higher than 20 million euros.

  Your client can give you more information on this. Information on the number of people employed by a company can be found in the Business Register.

• Mention the payment term for large companies in your general terms and conditions and contracts. Communicate this to your customer before you send the invoice. Have you filed your general terms and conditions at KVK? Adjust these as well. Good to know: large companies usually work with purchasing conditions. Ask your customer for adjusted purchasing conditions.

3. Indicate ‘retention of title’

Retention of title (‘eigendomsvoorbehoud’) means that you remain the owner of the delivered product until your customer has paid. If your customer does not pay, you can take back the products. You state the retention of title in your general terms and conditions.

4. Ask for payment in advance

Your risk is almost zero if your customer pays in advance. There are no rules for prepayment for business customers. But you can, for instance, offer an attractive discount if your customer pays in advance.

Are you supplying a product to a consumer? Then your customer can pay up to 50% in advance. It is not legally allowed for them to pay more. An advance payment or down payment can be included in the sales contract or general terms and conditions. Online shops are an exception. If your customer chooses to pay via iDEAL, full prepayment is allowed. Prepayment is not common if you provide a service to a consumer. Do you also supply a product in addition to the service? Then you can ask your customer for a maximum 50% deposit.

5. Consider invoicing

Make agreements with your customer about the invoice. For example:

• Ask your customer what should appear on the invoice and where. Think, for example, of a purchase order number, also called PO number.

• Find out how your customer wants to receive the invoice. An e-invoice from your invoicing system? An e-invoice via the European PEPPOL platform? Or a PDF or paper invoice? Make it easy for your customer to pay via a digital payment request. With a digital payment request, your customer does not have to enter an IBAN or invoice number. This happens automatically.

  You can send a payment request in different ways. Send it personally to your customer via WhatsApp, an SMS message, or email. Or embed it in your invoices with a QR code. Several services create payment requests. A well-known service in the Netherlands, for example, is Tikkie Zakelijk. You can also choose from several banks and payment platforms. iDEALis often used for digital payments in the Netherlands.

• Make a note of any discount for faster payments. This is also known as dynamic discounting.

Send your invoice as soon as possible after delivery of your product or service. Make sure your invoice is correct. Your customer may send back an invoice that has mistakes. Or they may pay late.

You want a happy customer. Therefore, after delivery of your product or service, ask if they are satisfied. In general, happy customers pay faster. Also, keep track of which customers pay on time and which pay late. Check if there happens to be a reason for late payments.

By law, the latest you can send an invoice is on the 15th of the month following the month in which you delivered the product or service. For example, if you delivered the product on 20 October, then send the invoice no later than 15 November.

Did your customer still not pay on time? Then you can take these legal steps.