Getting paid

Getting unpaid invoices paid: default, reminders, court order

General information on the law in Germany (as of September 2026), not legal advice. Other countries regulate this differently.

An unpaid invoice is not a patience problem, it is a deadline problem, and the most effective move happens before the loss: an invoice that names a real date ("payable by 30 September 2026") puts the customer in default the next day, with no reminder at all. Without such a date you either send one reminder, which is enough, or you wait for the statutory 30 days after the invoice arrives. From the start of default you are owed interest of 9 points above the base rate between businesses, so 10.52 percent a year at the base rate of 1.52 percent applying since 1 July 2026, 5 points where a consumer is involved, plus a flat 40 euros against business debtors. Those figures are small. Two others are not: at a margin of 25 percent a lost invoice of 2,500 euros needs 10,000 euros of new work to replace it, and the VAT on it was paid to the tax office long ago under accrual taxation. That VAT comes back through a correction once the claim is irrecoverable, but only if you make it. If more letters change nothing after about six weeks, the online court payment order costs 38 euros on claims up to 1,000 euros, takes twenty minutes, and produces an enforceable title valid for thirty years if the debtor does not object.

The invoice is written. The money is not there.

The work is done, the customer was happy, the invoice went out three weeks ago. Nothing has arrived. You look at the account again in the evening, you write a careful line the next morning, you get no answer, and after a fortnight the whole thing has quietly turned into a knot in your stomach that follows you into every other job.

That feeling is the reason this topic is handled badly almost everywhere. It turns a question of dates into a question of tone, and so the first six weeks go into wording rather than into the two or three moves that actually decide the outcome. Meanwhile the chance of being paid falls, and it falls fastest in the first month.

So this article starts one step earlier, with the invoice itself, then walks through the four stages and what each one is actually for, and ends with the part almost nobody claims back. Along the way a calculator puts the interest you are owed next to the two numbers that really describe the damage.

What has to be on the invoice before any of this applies: writing invoices and VAT →

Three ways into default, and one of them is free

Everything else in this article hangs on one date: the day default begins. From that day interest runs, from that day the flat rate is yours, and from that day any lawyer's fee becomes recoverable. There are exactly three routes to it, they differ by weeks, and which one applies to you was decided the moment you wrote the invoice.

When default begins

A date on the invoice

the next day

If it says "payable by 30 September 2026", the customer is in default on 1 October without you lifting a finger. A date fixed by the calendar makes the reminder unnecessary. That is the difference between a template that works for you and one that makes you work.

A reminder

on arrival

If the invoice only says "payable within 14 days", that is not a date fixed by the calendar. Then you need a reminder, and default begins the moment it arrives. One is enough; the widespread belief that three are required appears in no statute.

Thirty days after the invoice

at the latest

Even with no date and no reminder, default sets in 30 days after the invoice arrives at the latest. Against a private individual that only applies if the invoice pointed out this consequence. It is the slowest route and the only one that works without you doing anything.

One line in the template decides whether you ever have to chase anyone.

§ 286 Abs. 1 BGB for the reminder, § 286 Abs. 2 Nr. 1 BGB for the date fixed by the calendar, § 286 Abs. 3 BGB for the 30 days and the notice requirement towards consumers. Between businesses, payment terms above 60 days are only valid under narrow conditions (§ 271a BGB), and towards public bodies the limit is generally 30 days. General information on the law in Germany, not legal advice.

Four stages, and what each is actually for

The law prescribes none of this. The sequence below is simply the cheapest order in which to spend your own time, and its only real rule is that every step must be followed by the step it announces. Six weeks is a good total: long enough to be fair, short enough that the money is still there.

From reminder to title

1Payment reminder

days 1 to 10 after the due date

Friendly, short, with the invoice attached again. Most unpaid invoices at this stage are not a refusal to pay but a lost document, a change in the accounts department or somebody on holiday. Name a new date rather than a period, and the next step becomes a formality.

2Formal reminder with a deadline

days 10 to 30

One date, about ten days out, and the amount broken down: invoice, interest, and against a business debtor the 40 euro flat rate. One sentence on what happens after that date. And then it happens. A reminder that announces a court order and is followed by a fourth reminder teaches the debtor exactly how seriously to take you.

3Court payment order

from day 30 to 45

The online application to the central dunning court takes about twenty minutes; the court fee is 38 euros for claims up to 1,000 euros and half a fee from the table above that. Nobody checks whether your claim is justified, only whether the application is formally correct. The debtor has two weeks to object. If they do, the matter moves into ordinary litigation, and at that point you need a lawyer.

4Enforcement order

two weeks later

If the debtor does not object, you apply for the enforcement order. That is a title: it permits enforcement and stays valid for thirty years. An appeal within two weeks is still possible against it. Whether enforcement is worth it is a different question from whether you are right; against an insolvent debtor you end up with a valid title and no money.

A threat you do not carry out teaches the debtor what your next one is worth.

§§ 688 ff. ZPO for the court payment order, § 692 Abs. 1 Nr. 3 ZPO for the two-week objection period, § 699 ZPO for the enforcement order and § 700 ZPO for the appeal against it. The court fee follows Nr. 1100 of the schedule to the GKG: half a fee, minimum 38 euros since 1 June 2025. § 197 Abs. 1 Nr. 3 BGB for the thirty years. Once a claim is disputed, this stops being a form-filling exercise and becomes litigation: take legal advice. General information on the law in Germany, not legal advice.

What the loss actually costs

Every calculator on this subject works out the interest. It is the least important number in the field. Put in the invoice, the days, your margin and the VAT rate, and the interest appears next to the two figures that describe the real damage: the new work you need to replace the money, and the tax you have already handed over for a sale that never completed.

What the default costs you

Four numbers and one switch. The starting values are an example, not a recommendation. Nothing is stored or transmitted.

Who owes you the money?

Invoice amount, net

2.500 €

Days since default began

Your profit margin

25 %

VAT rate on the invoice

19 %

The interest and the flat rate

79 €

New work needed to replace it

10.000 €

What default entitles you to

79 €

10.52 percent a year plus the 40 euro flat rate. Worth having, never worth waiting for.

VAT already paid on this invoice

475 €

Due on the work, not on the payment. Recoverable, but only if you correct it.

Replacement turnover needed

10.000 €

At a margin of 25 percent one lost invoice costs 4.0 times its own value in new work.

After 45 days of default the law owes you 79 €, which is 3.1 percent of the invoice. To earn the lost amount again at a margin of 25 percent you need 10.000 € of new work. That ratio, and not the interest rate, is the argument for acting early.

The rate follows § 288 BGB: 1.52 percent base rate plus 9 points, so 10.52 percent a year. Between businesses the 40 euro flat rate comes on top, without proof of any cost. The base rate changes on 1 January and 1 July, so check it before you put a figure in a letter.

Your next step

Two months in, more letters change nothing. File for a court payment order instead: the online application takes about twenty minutes and the court fee is at least 38 euros, which the debtor owes you on top. It is not a lawsuit and it does not examine whether your claim is justified, so a debtor who simply objects moves the matter to a normal court case. Most do not object, and then you have an enforceable title valid for thirty years. Your interest claim of 39 euros goes into the application, and so does the fee.

Interest is calculated day by day on a 365-day year on the gross amount, without compounding, and without allowing for a change in the base rate during the period, so beyond six months of default the figure is an approximation. The days counted are days since default began, not days since the invoice date. The replacement turnover assumes your margin stays the same on the new work. The court fee shown is the statutory minimum, which is also the actual fee up to a claim of 1,000 euros. For a binding calculation in a specific case, ask a lawyer.

The part that comes back without the debtor

Of everything a default costs you, exactly one component can be recovered without the customer doing anything at all. It is also the component most founders never claim, because nothing in the process draws attention to it.

You have already paid the VAT.

Under accrual taxation, the statutory default, VAT arises with the work rather than with the payment. So on a net invoice of 2,500 euros, 475 euros went to the tax office for money that never arrived. That is not a flaw in the system but the price of being able to deduct input tax immediately as well.

Once the claim is irrecoverable, the tax has to be corrected.

The correction goes into the return for the period in which the loss becomes certain, not retrospectively into the period of the invoice. A claim is irrecoverable when payment cannot be expected for the foreseeable future: a serious refusal to pay, insolvency, or unsuccessful enforcement. Mere silence from the customer is not enough.

Nobody will remind you.

There is no notice and no notification. The correction is one line in your next return, and if you do not write it, the money stays with the tax office. So every time you send a second-stage reminder, flag the item in your books, or the claim will quietly disappear at year end.

Cash-basis VAT stops the problem from arising at all.

On application the tax office can allow you to account for VAT only when the money arrives. This is available up to 800,000 euros of prior-year turnover, among other cases, and to members of the liberal professions using the cash-basis profit method. The application is informal, it costs nothing, and for a young business it is almost always the calmer route. Whether it suits your case belongs in your next conversation with a tax adviser.

§ 13 Abs. 1 Nr. 1 Buchst. a UStG for when VAT arises under accrual taxation, § 17 Abs. 2 Nr. 1 UStG for the correction on irrecoverable claims, § 20 UStG for cash-basis VAT on application. Whether a particular claim counts as irrecoverable, and in which period, is a question for a tax adviser. General information on the law in Germany, not legal advice.

One thing this does not give you is a deduction for the lost profit. If you calculate your profit on a cash basis, the invoice never counted as income in the first place, so there is nothing to write off: the loss shows up simply as revenue that is not there. That is why the replacement turnover in the calculator above is the honest measure of the damage, and the tax correction is the only real refund.

Where the correction goes, and which rhythm you file in: VAT returns and simple bookkeeping →

Five things that happen before the invoice

Every hour spent on dunning is an hour nobody pays for. These five cost almost nothing and remove most of the cases in which dunning is needed at all.

A real date instead of a period in days, on every invoice and every quote.

A deposit from new customers and on larger jobs, typically 30 to 50 percent before you start.

Staged invoices on longer projects, so the full sum is never outstanding at once.

A quick look at the public company register before a first large order, which costs nothing.

A fixed calendar reminder for the day after the due date, so the first week does not slip away.

Five mistakes that cost weeks

Four of them come from a habit dressed up as a rule. The fifth comes from looking at a single customer instead of at your own process.

Treating three reminders as mandatory. The law knows no stages of dunning. A single reminder triggers default, and with a real payment date on the invoice you do not even need that. Writing three times out of politeness gives away six weeks in which the prospect of payment falls.

Inventing your own dunning fees. Against a consumer there is no statutory flat rate, only reimbursement of actual costs such as postage. Your own time spent writing the reminder is not among them. A line reading "dunning fee 15 euros" in your template rarely survives a challenge and weakens the rest of the letter.

Forgetting the 40 euro flat rate. Between businesses it is yours on every late payment, with no proof of any loss, on top of the interest. It is one of the few numbers in this field you can simply take.

Waiting until the year is nearly over. The claim expires at the end of the third year after the year it arose, so an invoice from March 2026 expires on 31 December 2029. That sounds like plenty of time and is not: the chance of seeing money after two years is close to zero, and only serving a court payment order suspends the clock.

Treating the loss as a one-off. One customer who does not pay is an event. Two are a pattern, and the pattern almost never sits with the customer. It sits in the invoice template, in the missing payment date, in the handover without a part payment, or in a job that started without a deposit.

Frequently asked questions

Do I have to send three reminders before applying for a court payment order?

No. The three stages of dunning are a commercial habit, not a legal requirement. Under § 286 BGB one reminder is enough to trigger default, and if the invoice carries a payment date fixed by the calendar, default begins without any reminder at all. A prior reminder is not even a legal condition for the court order; it is simply sensible, because interest runs from the start of default.

How high is default interest in 2026?

The base rate under § 247 BGB has been 1.52 percent since 1 July 2026. Where a consumer is involved, § 288 Abs. 1 BGB adds five percentage points, giving 6.52 percent a year. Between businesses § 288 Abs. 2 BGB adds nine points, giving 10.52 percent. The base rate changes on 1 January and 1 July, so check it before you put a figure in a letter.

What does a court payment order cost?

The court fee is half a fee from the table in the court costs act, with a minimum of 38 euros. Up to a claim of 1,000 euros it stays at that minimum. The debtor owes you the fee on top of the principal and it is listed in the order itself. If you instruct a lawyer or a collection agency you pay their fee first; it is recoverable only so far as it arose after default began, and for collection agencies only up to what a lawyer could charge.

Can I recover the VAT on an invoice that was never paid?

Yes, by a correction under § 17 Abs. 2 Nr. 1 UStG, once the claim is irrecoverable. It is irrecoverable when payment cannot be expected for the foreseeable future: insolvency, a serious refusal to pay, or unsuccessful enforcement. The correction belongs in the return for the period in which that becomes certain, and it does not happen by itself. Whether your case meets the conditions is a question for a tax adviser, not for a guide.

When does an invoice become time-barred?

Under the standard limitation period, in three years counted from the end of the year in which the claim arose. An invoice from 2026 therefore expires at the end of 31 December 2029. Serving a court payment order suspends that clock; a letter of reminder does not. An enforcement order turns the claim into a title, and a title runs for thirty years.

Is a collection agency worth it for small amounts?

Rarely. Their costs are recoverable only up to what a lawyer would be allowed to charge, and on small claims that amount sits in poor proportion to the principal. For an undisputed claim the court payment order is cheaper and faster. An agency or a lawyer makes more sense when the claim is disputed, when the debtor is abroad, or when several cases run at once.