For companies operating across borders or requiring a thorough understanding of the collection process in the DACH region, knowledge of the regulatory frameworks and cost structures in receivables management is essential. Although Austria and Germany are neighbouring countries that share a common language, there are significant differences that can substantially influence the success of recovering outstanding claims. In this article, we examine the key aspects of out-of-court and court-based receivables management in both countries for all types of businesses with unpaid invoices.
Out-of-court receivables management
Out-of-court receivables management aims to reach a settlement with the debtor without involving the courts. It encompasses demand letters, collection notices, telephone contact, and instalment payment arrangements.
Regulatory foundations
Austria (ABGB, UGB, Regulation BGBl. No. 141/1996):
Payment default: Payment default occurs when the creditor has duly fulfilled their contractual obligations and the debtor fails to meet the contractual or statutory payment deadline. Where no specific deadline has been agreed, payment is generally due upon performance of the service or receipt of the invoice. The contracting parties may agree on payment terms of up to 60 days for business-to-business transactions without these being considered grossly disadvantageous.
Timeliness of payment transfers: Where a due date is specified as a fixed calendar date, the owed amount must be credited and available in the creditor's account on that date. Where the due date is not fixed but arises from, for example, performance of the service or issuance of the invoice, the transfer instruction must be issued without unnecessary delay (typically 2 to 4 days) after the relevant triggering event. In consumer transactions, the transfer instruction generally only needs to be issued on the due date. The risk of transfer delays lies with the debtor.
Demand letters: In Austria, a demand letter is not a mandatory prerequisite for the judicial enforcement of a claim in the event of payment default. The creditor may in principle file a claim immediately after the due date. However, a demand letter is recommended as a first step towards an out-of-court resolution and should, for evidential purposes, be issued in writing (e.g. by registered post) with a deadline set to a definitive final date.
Default interest: In the event of payment default, the creditor is entitled to demand default interest from the day following the due date. For consumer transactions, the statutory default interest rate is 4 percent per annum. For business transactions, the statutory default interest rate is 9.2 percentage points above the base rate. This is the base rate applicable on the first calendar day of each half-year (e.g. 1.53 percent as of 1 July 2025, resulting in a default interest rate of 10.73 percent). This increased rate applies only in cases of culpable payment default; for non-culpable default, the rate is likewise 4 percent per annum.
Collection costs: The recoverability of collection costs in Austria is governed by the Regulation of the Federal Minister for Economic Affairs on the Maximum Rates of Remuneration for Collection Agencies (BGBl. No. 141/1996). In business transactions, the creditor may additionally demand a flat fee of 40 euros for recovery costs, unless otherwise contractually agreed. Furthermore, in cases of culpable payment delay, dunning and collection costs (e.g. for collection agencies or lawyers) may be claimed, provided they are reasonable, necessary, and appropriate. A contractual provision to safeguard the right to reimbursement is recommended, though strict standards apply for specifying cost amounts in consumer transactions.
Data protection: The processing of personal data in the collection process is subject to the GDPR and national data protection legislation. The transfer of debtor data to a collection service provider is generally permissible where the creditor has a legitimate interest and the rights of the debtor do not prevail.
Germany (BGB, UWG, RDG):
Default: A debtor is in default when they fail to pay a due invoice after receiving a demand letter, or when a calendar-determined payment deadline has been set. For consumers, a demand letter must have been issued unless a calendar-determined payment deadline exists (at the latest 30 days after the due date and receipt of the invoice). In business transactions, default may occur even without a demand letter 30 days after the due date and receipt of the consideration.
Collection costs: Pursuant to § 280(1), (2) and § 286 BGB in conjunction with § 249(1) BGB, the creditor may demand compensation from the debtor for the damage caused by the default. This includes the costs of a collection service provider or lawyer, provided these were necessary and appropriate. The amount of these costs is limited by the Legal Services Act (RDG) and the Lawyers' Remuneration Act (RVG).
Unfair Competition Act (UWG): The UWG is particularly relevant in the collection sector, as it prohibits unfair commercial practices. Collection service providers must adhere to the principles of fair competition. This means that demand letters and collection notices must not be misleading, aggressive, or harassing. Threats of excessive legal consequences, deliberate misrepresentation of the legal situation, or the assertion of claims that the service provider or creditor knows to be non-existent may be regarded as unfair competitive practices. In particular, the exertion of excessive pressure or the damaging of a debtor's reputation through impermissible means is prohibited. The UWG thus protects debtors from unscrupulous or unethical collection methods and ensures that the recovery of claims is conducted fairly and transparently.
Data protection: The processing of personal data in the collection process is subject to the GDPR and national data protection legislation. The transfer of debtor data to a collection service provider is generally permissible where the creditor has a legitimate interest and the rights of the debtor do not prevail.
Cost structures (out-of-court)
In both countries, collection service providers or lawyers may be engaged.
Austria: The maximum amounts for collection fees are clearly defined by the aforementioned regulation (BGBl. No. 141/1996) and provide a reliable basis for calculation.
Example: For a claim of 500 euros, collection fees under the regulation (depending on the dunning stage and effort) may be higher, e.g. up to approx. 120 euros plus VAT.
Germany: Costs are typically based on the value of the claim and are calculated according to the RVG or the standard rates for collection service providers. In the event of default, these costs are borne by the debtor.
Example: For a claim of 500 euros, out-of-court collection fees (typically 0.5 to 1.0 business fee) generally range between 45 and 90 euros plus disbursements and VAT.
Key distinction: Collection service providers such as incaseof.law often work on a success-based model, meaning the instructing company typically pays no direct fees for out-of-court collection. Instead, the collection service provider retains the debtor-side collection fees and default interest. This significantly reduces the risk for the creditor.
Court-based receivables management
If out-of-court dunning does not lead to success, court proceedings often remain the only option. The procedure differs considerably between the two countries.
Regulatory foundations
Austria (ZPO, EO):
Payment order proceedings (Mahnklage): Austria does not have a separate payment order notice (Mahnbescheid). Claims up to 75,000 euros can be asserted through a simplified payment order procedure (Mahnklage) at the District Court (Bezirksgericht). If the debtor does not file an objection, the claim becomes a legally enforceable title through a final payment order.
Standard litigation: For claims exceeding 75,000 euros or disputed claims, standard civil proceedings are conducted before the District Court or Regional Court (Landesgericht).
Court jurisdiction: District Courts have jurisdiction for payment order proceedings up to a disputed amount of 15,000 euros. Where the disputed amount in payment order proceedings exceeds this threshold, the Regional Courts have first-instance jurisdiction. Unless otherwise agreed, the locally competent court is generally the court at the defendant's domicile.
Mandatory legal representation: Legal representation by a lawyer is not required by law for disputed amounts up to 5,000 euros. For disputed amounts exceeding 5,000 euros, legal representation is mandatory.
Enforcement (Exekution): Enforcement is carried out upon application by the creditor through the Enforcement Court (Bezirksgericht). Common enforcement measures include wage and bank account garnishment.
Electronic court filing (ERV): Austria is a European pioneer in electronic court filing. The submission of claims and court documents is mandatory for lawyers via the electronic ERV system.
Limitation periods: Claims for the delivery of goods, performance of work, or other services in a business operation are subject to a 3-year limitation period. A time-barred claim can no longer be enforced through the courts by the creditor.
Germany (ZPO):
Payment order proceedings (Mahnverfahren): The court-based payment order procedure is a simplified process for enforcing undisputed monetary claims. It begins with an application for the issuance of a payment order (Mahnbescheid) at the competent payment order court. If the debtor does not file a timely objection, an enforcement order (Vollstreckungsbescheid) can be requested.
Standard litigation: Where the claim is disputed or direct litigation is pursued, civil proceedings are initiated before the Local Court (Amtsgericht) or Regional Court (Landgericht).
Enforcement: With an enforceable title (enforcement order, judgment), compulsory enforcement (e.g. wage garnishment, bank account garnishment, bailiff) can be initiated.
Electronic court filing (ERV): The submission of applications and court documents in Germany is mandatory or possible electronically via the special electronic lawyer mailbox (beA) or other approved channels. incaseof.law enables its clients to connect seamlessly to the ERV via the incaseof.law software. For German clients, incaseof.law additionally uses the electronic authority mailbox (eBO) to ensure comprehensive and legally compliant digital communication with courts and authorities.
Cost structures (court-based)
Court costs generally comprise court fees and lawyer fees.
Austria:
Court fees are calculated according to the Court Fees Act (GGG), based on the disputed amount and payable in advance by the claimant.
Lawyer fees are calculated according to the Lawyers' Tariff Act (RATG) or the Autonomous Fee Criteria (AHK) and are likewise based on the disputed amount.
Principle: The losing party bears the costs of the legal dispute.
Germany:
Court fees are calculated according to the Court Costs Act (GKG) and based on the disputed amount. They are payable in advance by the claimant.
Lawyer fees are calculated according to the RVG and the disputed amount. They are likewise to be advanced by the claimant.
Principle: The losing party bears the costs of the legal dispute.
Cost comparison: Court fees in Austria tend to be somewhat lower than in Germany for comparable disputed amounts, while lawyer fees, particularly in more complex proceedings, may be similar or in some cases higher.
The role of AI and electronic court filing in both countries
incaseof.law fully leverages the possibilities of electronic court filing (ERV) in both countries. The automated submission of payment order applications in Germany or payment order claims in Austria via our platform significantly reduces administrative effort and accelerates the process. incaseof.law enables its clients to connect seamlessly to the ERV via the incaseof.law software. For German clients, incaseof.law additionally uses the electronic authority mailbox (eBO) to ensure comprehensive and legally compliant digital communication with courts and authorities. Our AI agents not only optimise out-of-court dunning but also support the precise preparation of case data for court proceedings, minimise error sources, and ensure the highest level of legal precision.
Conclusion
Although the fundamental principles of receivables management in Austria and Germany are similar, there are important differences in the detail regarding regulatory frameworks and cost structures. A thorough understanding of these nuances is critical for the efficient and successful recovery of outstanding claims. By deploying modern technologies such as AI and electronic court filing, companies can master this complexity and significantly improve their recovery rates. incaseof.law offers a comprehensive, legally sound, and technologically leading solution for this purpose.
