A customer who pays late is in effect borrowing money from you, without interest and without asking. You pay for it yourself: with interest on your own credit, with the time it takes to chase payment, and with the risk that you never see the money if the customer collapses. Research shows that late payment hits small businesses hard and that shorter terms can prevent bankruptcies. Dutch law gives you a maximum payment term, an interest rate of 10.4% and minimum compensation of €40 per invoice.
In short
- Late payment costs you financing, time and risk. Among British SMEs, 59.5% of the companies studied called it an important problem.
- When France restricted the payment term for road hauliers, their probability of default fell by 25%.
- Without an agreement, a business customer must pay within 30 days. After that you may charge 10.4% commercial interest and at least €40 in collection costs.
In this article
- What does a customer who pays late cost you?
- How long do Dutch businesses wait for their money?
- What does late payment do to a small business?
- Does a shorter payment term really help?
- Which payment term can a customer impose on you?
- What compensation can you claim when a customer pays late?
- How do you limit the cost of late payers?
What does a customer who pays late cost you?
Three things: money, time and risk. As long as the invoice is unpaid, you are financing the customer. Chasing payment takes hours. And the longer an invoice is outstanding, the greater the chance that you never see the money.
The first is the easiest to calculate. Suppose a customer pays a €20,000 invoice thirty days late. At the statutory commercial interest rate of 10.4%, that is about €171 in interest (Dutch government, 2026). You may charge that amount to the customer. If you do not, you pay it yourself, through interest on your overdraft or through money you cannot invest.
The second and third are harder to measure, but often larger. Research among 211 small British manufacturers showed that 59.5% considered late payment an important or very important problem. For 43.1% the same applied to bad debts, invoices that will never be paid (Peel, Wilson & Howorth, 2000).
How long do Dutch businesses wait for their money?
On average about 40 days, and that figure is falling only slowly. In 2011 the average payment period between businesses was more than 45 days. In 2015 it was 41 days and in 2019 39.5 days (Parliamentary paper 35 769, no. 3).
Large companies paid their smaller suppliers more slowly than average. According to the government, that period remained above 41 days (Parliamentary paper 35 769, no. 3). That was the reason to shorten the statutory payment term for large companies paying SMEs to 30 days.
Note: these are averages from the years before the 2022 change in the law. More recent official figures are not included in this source. For your own business, your own list of receivables says more than a national average.
What does late payment do to a small business?
It passes the problem on. A company that gets paid late often pays late itself. In this way a shortfall travels through the whole chain, until it hits a company without a buffer somewhere.
In the British study, 89% of the small businesses said that they too, to a greater or lesser extent, paid their suppliers late (Peel, Wilson & Howorth, 2000). So late payment is rarely just a problem between you and one customer.
The worst case is a customer that goes bankrupt while your invoices are unpaid. Swedish research showed that suppliers that gave more credit suffered such a loss more often, and that this loss substantially increased their own chance of bankruptcy (Jacobson & von Schedvin, 2015).
According to the Presidency of the Council of the European Union, late payment accounts for 25% of bankruptcies in the EU (Council of the EU, 2024). That is a policy estimate and not the result of a single study. It does show how seriously European policymakers take the problem.
Does a shorter payment term really help?
Yes, there is strong evidence for this from France. When a law restricted the payment term for French road hauliers, their probability of default fell by 25%. The effect lasted and was concentrated among companies with little cash.
Barrot compared the period before and after the law, for companies to which the rule applied and for companies to which it did not. This allowed him to separate the effect of the law from other developments. The lower bankruptcy risk was not offset by lower profits. After the law, more small hauliers also started up (Barrot, 2016).
The lesson for you: long payment terms are not a neutral gesture towards a customer. They are a loan, and that loan weighs most heavily on companies with the smallest buffer. The shorter the term you agree, the less of your own money is tied up with customers.
Which payment term can a customer impose on you?
Without an agreement, a business customer must pay within 30 days of receiving the invoice. With an agreement, 60 days is the maximum, unless you explicitly agree a longer term and that is not manifestly unfair to you. This is set out in the Dutch Civil Code (article 6:119a of the Civil Code).
A stricter rule applies to large companies. If a large company pays an SME, the payment term is at most 30 days. An agreement for a longer term is void, so invalid (article 6:119a(6) of the Civil Code). This rule has applied since 1 July 2022 (Bulletin of Acts and Decrees 2022, 146 and 175).
A large company here is a legal entity that, two years in a row, meets at least two of these three conditions: more than €25 million in assets on the balance sheet, more than €50 million in net turnover and 250 or more employees (article 6:119a(6) of the Civil Code, with the thresholds from article 2:397 of the Civil Code).
What compensation can you claim when a customer pays late?
Two things: the statutory commercial interest and collection costs of at least €40. Both apply automatically from the day after the final payment date. You do not have to send the customer a reminder first.
The statutory commercial interest rate has been 10.4% per year since 1 July 2026 (Dutch government, 2026). The rate changes every six months. It is the European Central Bank rate for its main loans to banks, plus 8 percentage points (article 6:120 of the Civil Code). If you have agreed a different interest rate, that rate applies (article 6:119a of the Civil Code).
In addition, you are entitled to compensation for the cost of collecting your money, the collection costs. For a business customer this is at least €40, without you having to send a reminder first. This minimum may not be varied to your disadvantage (article 6:96(4) of the Civil Code). The well-known fourteen-day letter is only required for consumers (article 6:96(6) of the Civil Code).
How do you limit the cost of late payers?
By keeping the term short, invoicing on time and making your rights visible. The research shows where the money leaks away. The law gives you the means to limit that.
Agree the term in advance
Put it in your quotation and terms. Without an agreement 30 days applies, but a clear agreement prevents discussion.
Invoice straight after delivery
The term only starts once the customer has the invoice. Every day you wait pushes payment back.
State interest and collection costs on the invoice
You are entitled to them even without stating them, but a customer who sees them knows you mean it.
Limit the credit per customer
How much may one customer owe you? Weigh that amount against what you can absorb if that customer collapses.
A customer who regularly pays late costs you more than the interest on their invoice. They take up your money, your time and your room at the bank. Weighing that against the revenue they bring is an ordinary business decision.
Sources
- Dutch government (Rijksoverheid), How high is the statutory interest rate? Consulted October 2026. rijksoverheid.nl
- Peel, M.J., Wilson, N. & Howorth, C. (2000). Late payment and credit management in the small firm sector: some empirical evidence. International Small Business Journal, 18(2), 17-37. doi.org
- House of Representatives, Amendment of Book 6 of the Dutch Civil Code to shorten the statutory payment term to 30 days, explanatory memorandum, parliamentary paper 35 769, no. 3, 2021. officielebekendmakingen.nl
- Jacobson, T. & von Schedvin, E. (2015). Trade credit and the propagation of corporate failure: an empirical analysis. Econometrica, 83(4), 1315-1371. doi.org
- Council of the European Union, Proposal for a Regulation on combating late payment in commercial transactions, Presidency background note, 6586/24, 16 February 2024. consilium.europa.eu
- Barrot, J.-N. (2016). Trade credit and industry dynamics: evidence from trucking firms. The Journal of Finance, 71(5), 1975-2016. doi.org
- Dutch Civil Code Book 6, articles 6:96, 6:119a and 6:120. Consulted on wetten.overheid.nl, October 2026. wetten.overheid.nl
- Act of 30 March 2022 amending Book 6 of the Civil Code to shorten the statutory payment term to 30 days, Bulletin of Acts and Decrees 2022, 146, and commencement decree, Bulletin of Acts and Decrees 2022, 175. officielebekendmakingen.nl