When working as an entrepreneur, it sometimes happens that the customer fails to pay the bill. Here’s what you can do to collect the payment.
Sending a payment reminder
It’s good to remember that if an invoice is paid on the due date, it will appear in your account with a delay of a few days. However, if the payment doesn't appear in your account within a few days, you can remind the customer to pay the invoice. Even before sending a payment reminder, you can remind your customer by email, text message or phone call.
After waiting a few days after the due date, you can send the customer a payment reminder. You can add a reminder fee. The reminder fee for a consumer customer may not exceed 5 euros, but the amount of the reminder fee for a business customer is not limited.
You can send a payment reminder to a business customer as soon as you notice that the invoice has not been paid by the due date. To a consumer customer a payment reminder with a maximum reminder fee of EUR 5 may only be sent if the payment term of the invoice is 14 days and 14 days have passed since its due date. If you do not add a reminder fee, you can also send a reminder to the consumer customer as soon as you notice that the invoice has not been paid.
If a penalty interest rate has been agreed in your assignment agreement, you can also add it to the payment reminder.
A demand for payment, on the other hand, means a letter sent by a debt collection agency asking your customer to pay their bill.
As an entrepreneur, you can also transfer the invoice to a debt collection agency for collection if your customer does not pay it on time.
If a consumer customer's invoice is to be collected, a payment reminder must first be sent. After 14 days from the due date of the reminder, the collection can be started.
To a business customer a reminder with a 7-day payment period must be sent before collection. Once the reminder is due, debt collection can begin.
Often debt collection does not cost anything to the entrepreneur, as collection costs are charged to the customer. However, you should always find out from the collection agency to avoid surprises.
Debt collection might be a long process and it might take a long time to get the payment from the customer. The collection agency takes all the necessary actions to get the payment and if needed declares the customer insolvent. If the customer is found insolvent, the invoice can be marked to the bookkeeping as a loss for the entrepreneur.
Verification of customer credit information
As an entrepreneur, you can also always check your customer’s credit information before you sell an invoice. You can read more in our article (in Finnish).