Invoices and receivables management · Germany
Payment terms on the invoice: what to state, what applies and when the customer is in default
Setting payment terms on invoices in Germany: usual periods, “payable within 14 days”, default, legal limits, cash discounts and wording that works.
In brief
The payment term is the period within which your customer should pay the invoice; 14 or 30 days are usual. It is not a mandatory invoice item, and without an agreement payment can be demanded immediately. A payment term that appears only on the invoice does not put the customer in default automatically, however. For that you need a contractually agreed date, a reminder after the term has expired or the 30-day rule, which applies to private customers only if the invoice contains a notice.
From payment term to default
- AgreeRecord the payment date in the quote, contract or order confirmation.
- On the invoiceA specific date instead of “promptly” or “immediately”.
- Follow upSend one clear reminder after the term has expired.
- Hand overIf payment does not arrive, pass the claim to a collection agency.
What is a payment term, and does it have to be on the invoice?
The payment term (Zahlungsziel) is the period you grant your customer for payment. It usually appears on the invoice as “payable within 14 days” or as a date. It is not a mandatory item. The German VAT Act (UStG) requires other details, but no payment term. If nothing at all has been agreed, payment can be demanded immediately under the German Civil Code (BGB); for contracts for work, payment falls due on acceptance.
A payment term still belongs on every invoice. It tells the customer when you expect the money and tells your accounts team when to follow up. Every invoice should contain these details:
- Full name and address of you and your customer
- Tax number or VAT identification number
- Invoice date and sequential invoice number
- Quantity and type of goods or type and scope of the service, and the date of supply
- Price, tax rate and tax amount
- Any reduction agreed in advance, such as a cash discount
- Payment term as a date, bank details and payment reference
The first six points are mandatory under the VAT Act. The last point is not mandatory, but it decides how quickly the money arrives. Check your invoice template for exactly this line today.
Which payment periods are usual?
There is no statutory payment period. You agree it freely. In practice three levels have become established: 7 days for small amounts and private customers, 14 days as the standard for many service providers and trades businesses, 30 days in business-to-business dealings. Longer terms are a matter of negotiation and have legal limits, more on which below.
Choose the shortest period your customer can realistically meet. A long payment term is an interest-free loan to your customer. For new customers, large amounts or long projects, down payments or interim invoices protect you better than a short period on the final invoice.
How to proceed: set one standard period for all invoices and only deviate from it deliberately and in writing.
Due date and default: what does the payment term do?
Two concepts need to be kept apart. Due (fällig) means you may demand payment. Default (Verzug) means the customer is paying late and therefore has to bear interest and costs. The payment term determines when payment is due. For default, what matters is where the term is written.
- Agreed in the contract: If the date is in the quote, contract, incorporated terms and conditions or an order confirmation the customer accepted, the customer is in default when it passes, without a reminder. This applies to a date such as “by 30 October” and to a calculable period such as “14 days after delivery”.
- Only on the invoice: A payment term you print unilaterally on the invoice is not an agreed date. Default then starts when a reminder you send after the term has expired is received.
- Neither reminder nor agreement: Then the 30-day rule applies. Your customer is in default at the latest if they do not pay within 30 days of the due date and receipt of the invoice.
For private customers the 30-day rule only applies if the invoice expressly points out this consequence. A suitable sentence reads: “If you do not pay within 30 days of the due date and receipt of this invoice, you will be in default without any further reminder.” Add this sentence to your template for private customers.
Two points decide the matter in a dispute. First: you have to prove that the invoice was received, not your customer. Send invoices in a way that lets you prove receipt, for example via a customer portal or with a confirmation of receipt. Second: for contracts for work, payment only falls due on acceptance. A payment term running from the invoice date comes to nothing if acceptance is missing. For projects, link the term to acceptance and have acceptance confirmed in writing.
How long may an agreed payment term be?
In business-to-business dealings the BGB sets limits so that large customers cannot use small suppliers as a bank:
| Situation | Limit |
|---|---|
| Individually agreed payment term between businesses | More than 60 days after performance or receipt of the invoice only if expressly agreed and not grossly unfair to you |
| Public contracting authority as customer | More than 30 days only if expressly agreed and objectively justified; more than 60 days invalid |
| Payment term in your customer’s purchasing terms | More than 30 days after performance or receipt of the invoice is, in case of doubt, deemed unreasonably long |
| Inspection or acceptance period in the purchasing terms | More than 15 days is, in case of doubt, deemed unreasonably long |
These limits do not apply where a consumer owes the payment, nor to agreed interim or instalment payments. If a major customer prescribes 90 days in its purchasing terms, do not accept this silently. Negotiate the term in the order confirmation and record the result in writing.
Cash discount: an incentive for fast payment
A cash discount (Skonto) is a price reduction for paying quickly. The customer has no statutory right to it; you offer it voluntarily. If it is agreed, it must appear on the invoice, because the VAT Act requires every reduction of the price agreed in advance to be stated there.
Do the maths before offering a cash discount. A 2 percent discount for paying after 14 instead of 28 days corresponds to around 53 percent annual interest (2 ÷ 98 × 365 ÷ 14). That only pays off for you if you urgently need the money. With customers who pay reliably, you give away margin.
If a customer deducts the discount even though they pay after the discount period, the difference remains outstanding. Send a reminder for it like any other balance, with invoice number and exact amount.
Wording: how to write the payment term correctly
The most common mistakes are unclear periods. “Payable within 14 days” leaves open whether the period runs from the invoice date or from receipt. A date leaves no room for interpretation.
| Weak | Better | Why |
|---|---|---|
| Payable promptly | Payable without deduction by 30 November 2026 | A date is unambiguous and easy to monitor |
| Payable within 14 days | Payable within 14 days of the invoice date, i.e. by 16 November 2026 | Makes clear when the period starts |
| Payable immediately | Due on receipt of this invoice, payable by 9 November 2026 | “Immediately” leads to queries and excuses in practice |
| 2 % discount | If paid by 16 November 2026, less 2 % discount (23.80 euros), otherwise without deduction by 30 November 2026 | Discount period, amount and final date are fixed |
| Please transfer the amount | Please transfer 1,190.00 euros to IBAN … with the reference R-2026-118 | The payment can be matched unambiguously |
More important than the wording on the invoice is the agreement before it. Put the payment date in the quote or order confirmation. Only then will your customer be in default without a reminder when it passes.
Example: An agency invoices a limited company (GmbH) 4,800 euros on 1 September 2026, received by email the same day. The customer does not pay. In version A the order confirmation says “payment by 15 September 2026”. The customer is in default from 16 September without a reminder; by 31 October, 63.64 euros of interest accrues for 46 days (4,800 × 10.52 % × 46 ÷ 365). In version B, “payable within 14 days” appears only on the invoice. The agency sends a reminder on 1 October, which is received on 2 October. Default begins with that receipt, and interest runs from the following day: by 31 October that is 29 days and 40.12 euros of interest (4,800 × 10.52 % × 29 ÷ 365). The 40-euro flat fee arises in both cases, but just over two weeks later in version B. The difference lies solely in where the payment term is written.
Payment term expired: your next step
Once the payment term has expired, send one clear reminder: invoice number, amount outstanding, new date. You can create a finished letter with the payment reminder generator. From the start of default your customer owes late-payment interest; between businesses that has been 10.52 percent a year since 1 July 2026, plus a flat fee of 40 euros. The late-payment interest calculator works out the amount for your invoice if you select Germany there.
If the customer does not react to the reminder, do not write a second and third. The law does not require them. How to decide between a collection agency and a court payment order is shown in the article Final reminder ignored.
When is it worth handing over to a collection agency?
As soon as the payment term has expired, your customer is in default and has raised no objections. A collection agency then takes over applying the pressure, and the defaulting debtor bears the default costs within the legal limits.
At incaseof.law you hand the claim over online in the client portal: register, enter debtor, amount and due date, upload invoice and documents. Include the order confirmation with the agreed payment term; it proves default. We accept due, undisputed claims with documented payment default, with no minimum volume. You receive 100 percent of the principal claim. In regular out-of-court collection there are no costs from incaseof.law, even if the debtor does not pay, and no success fee on your principal claim. Court fees and, in Austria, MANZ transmission fees only arise once you approve court proceedings. Recovery and duration are not guaranteed. All steps are on Submit a claim.
Frequently asked questions
Is a payment term on the invoice mandatory?
No. The VAT Act does not require a payment term. Without an agreement, payment can be demanded immediately. A clear date on the invoice still speeds up payment.
When do the 14 days start with “payable within 14 days”?
The wording leaves it open; it could be the invoice date or receipt. Avoid the dispute by stating the starting point or simply giving a date. A date is unambiguous for both sides.
Is my customer automatically in default once the payment term expires?
Only if the payment term was agreed in the contract. If it is only on the invoice, you need a reminder after the term has expired. Without a reminder, the 30-day rule applies at the latest, for private customers only with a notice in the invoice.
Can a major customer impose a 90-day payment term on me?
In its purchasing terms, more than 30 days is deemed unreasonably long in case of doubt. Individually agreed, more than 60 days is only valid if done expressly and not grossly unfair to you. Public authorities may agree 60 days at most.
What do I do if the customer wrongly deducts a cash discount?
The difference remains outstanding. Send a reminder for it with invoice number and exact amount. If it stays unpaid, you can hand it over like any other balance.
Sources and scope
- German Civil Code, § 271a BGB: agreements on payment, inspection or acceptance periods
- German Civil Code, § 286 BGB: default of the debtor
- German Civil Code, § 308 BGB: prohibited clauses with possibility of evaluation
- German VAT Act, § 14 UStG: issuing invoices
- IHK Köln: reminder and default (German)
Sources checked 7 October 2026. Primary legal sources are in German. Examples are our own simplified illustrations. This English guide concerns Germany; it does not describe English law.
Related topic: Receivables management.
Payment term expired? Hand it over now
Submit the overdue invoice online in the client portal, with order confirmation and reminder. The case team takes over the follow-up.
Submit a claimIn regular out-of-court collection there are no costs from incaseof.law, even if the debtor does not pay, and no success fee on your principal claim. Court fees and, in Austria, MANZ transmission fees only arise once you approve court proceedings. Recovery and timing are not guaranteed; exceptions and how partial payments are allocated are set out under Costs and scope of services.
About the author
Stephan Holzbach
Stephan Holzbach is co-author of “Warten aufs Geld”, a study of receivables held by Austrian companies. At incaseof.law he writes guides for creditors who want unpaid invoices settled sooner.
The sources for this article are listed under Sources and scope. This article is general information and does not replace advice on an individual case.