An engineering firm pays salaries every month, but on a long project it only receives money when it invoices and the client pays. The more often you invoice and the shorter the payment term, the less work you pre-finance yourself. That is why the agreement on instalments is just as important as the rate.
The law limits long payment terms. Between businesses 60 days is the maximum, unless you expressly agree otherwise. A large company may not make an SME supplier wait longer than 30 days, and the government must in principle pay within 30 days.
In short
- Invoice in instalments according to progress. In the worked example of a € 120,000 project, monthly invoicing with 30 days means you pre-finance at most € 10,000, three instalments with 60 days up to € 50,000.
- A payment term of more than 30 days that a large company agrees with an SME firm is void (Dutch Civil Code 6:119a(6)). The government pays within 30 days, and at most 60 days if the assignment objectively justifies it (Civil Code 6:119b(5)).
- If a business client pays late, statutory commercial interest is due, 10.4% a year since 1 July 2026, plus at least € 40 in collection costs without a reminder.
In this article
- Why does an engineering firm run short of cash on long projects?
- Which payment term may a business client agree?
- How quickly must the government or a municipality pay?
- What can you charge if a client pays late?
- What should you agree in the assignment to get paid faster?
- What does research say about long payment terms and small businesses?
- How do you keep track of your money during a project?
Why does an engineering firm run short of cash on long projects?
Because you do the work first and only receive money later. Everything you have done but not yet been paid for, you finance yourself. That is the work in progress, meaning work not yet invoiced, plus the outstanding invoices.
A worked example, not an industry figure. A € 120,000 project runs for 12 months and you do € 10,000 of work each month. If you invoice monthly and the client pays within 30 days, about € 10,000 is outstanding at the end of each month. If the client waits 60 days, that becomes € 20,000.
If you only invoice after each phase, for example in three instalments after months 4, 8 and 12, and the client pays after 60 days, the amount rises to € 50,000. That is five months of work you pay for yourself, in salaries, rent and software.
Which payment term may a business client agree?
Between businesses 60 days is the maximum. A longer term is only allowed if you expressly include it in the agreement and it is not manifestly unfair to you as the supplier (Civil Code article 6:119a(5)). If no term has been agreed, statutory interest starts 30 days after the day on which the client received the invoice (paragraph 2).
A large company may not agree more than 30 days with a small firm. A clause that does so anyway is void (Civil Code article 6:119a(6)). Large here means: a legal entity that exceeds at least two of these limits two years in a row: € 25 million in assets, € 50 million in net sales and 250 employees (Civil Code article 2:397(1)). Your firm itself must then stay below those limits.
This affects many firms working for large contractors, developers or industrial clients. If their purchasing terms say 60 or 90 days, that clause is not valid. Ondernemersplein, the government business portal, sums it up: large companies must pay SMEs and self-employed businesses within 30 days (Ondernemersplein, payment term).
How quickly must the government or a municipality pay?
Within 30 days. A public body, such as central government, a province, a municipality or a water board, may only agree a longer term if it is expressly in the agreement and the special nature of the assignment objectively justifies it. Even then the maximum is 60 days (Civil Code article 6:119b(1) and (5)).
Watch the term for approval. A public body that wants to assess the work first may in principle take no more than 30 days for this. A longer term must be expressly stated in the agreement and the tender documents and may not be manifestly unfair (Civil Code article 6:119b(4)). So in a tender, read not only the payment term but also the rules for acceptance of your report or design.
What can you charge if a client pays late?
Statutory commercial interest and at least € 40 in collection costs. Commercial interest has been 10.4% a year since 1 July 2026 (Rijksoverheid, statutory interest rate). You charge it from the day after the final payment date until the day the client pays (Civil Code article 6:119a(1)). After each year, the interest is added to the amount on which you charge interest (paragraph 3).
The € 40 is a minimum that is due without a reminder from the day after the final payment date. It may not be changed to your disadvantage (Civil Code article 6:96(4)). If you incur more costs to get your money, you can claim them as reasonable costs.
Worked example of commercial interest
An instalment invoice of € 24,000 is paid 60 days after the final payment date. The interest is € 24,000 x 10.4% x 60/365 = € 410.30. On top of that come at least € 40 in collection costs. This is an example using the rate from 1 July 2026. If the rate changes during the delay, you calculate each period with the rate that applied then.
Whether you actually charge the interest is a choice. Many firms do not do so with a regular client. It does help to mention the interest on the invoice and in the reminder. Then the client knows that paying late costs money. What late payment costs your business is also covered in the article what late payment by clients costs you.
What should you agree in the assignment to get paid faster?
A payment schedule in instalments and a short term per invoice. The standard terms DNR2025, which many engineering and architecture firms use, already cover this. The parties agree a payment schedule in instalments. Without a schedule, the consultant invoices in monthly instalments according to the progress of the work (DNR2025, article 13.1).
- Payment within 30 calendar days of the invoice date. The client's internal processes do not change that term (article 13.4).
- If payment is late, the client is in default and statutory interest is due, also on a part that was wrongly disputed (article 13.5).
- A dispute must be in writing and with reasons before the due date. The client pays the undisputed part on time as normal (article 13.6).
- The consultant can ask for reasonable security for payment if the size or nature of the assignment objectively gives reason to do so (article 13.2).
Security can be an advance payment or a bank guarantee, for example. Ask for it especially with a new client, a client with a poor payment record or a project that is large for your firm. DNR2025 only applies if you declare it applicable in the assignment (DNR2025). If the client uses its own purchasing terms, check which terms they contain.
Specify every invoice so that the client can check it and trace it back to the assignment. Article 13.3 of DNR2025 also requires this. An invoice with the project number, the phase and the percentage completed gives the client less reason to wait.
What does research say about long payment terms and small businesses?
Long payment terms mainly affect small businesses with little room in their cash. In France, a law restricted payment terms in road haulage. A study found that hauliers' chance of default was 25% lower afterwards. The effect was mainly among businesses with little cash, and more small businesses entered the market (Barrot, 2016).
An American study looked at suppliers to large retail chains. When a large buyer paid one month later, this went together with 1.2% less investment at the supplier. The effect was strongest when banks gave little credit and for suppliers that found it hard to raise money (Murfin & Njoroge, 2015).
Both studies concern other sectors and other countries than a Dutch engineering firm. The second finds an association, not a proven cause. Together they do show why the law limits terms for small suppliers: a business that waits a long time for its money invests less and runs more risk.
How do you keep track of your money during a project?
With a monthly cash flow forecast in which you show per project when you invoice and when the client is expected to pay. Set the fixed costs against it, such as salaries, payroll tax, VAT and rent. Then you can see in advance in which month money will be tight.
- Invoice at the end of every month or every phase, on a fixed day, and not only when someone has time.
- Track per project how much work has been done but not yet invoiced. If that grows, money is lying idle.
- Call the day after the due date, not after a month. With government clients it helps to put the purchase order number and the right contact person on the invoice.
- Keep a buffer for the months in which a large project is between two instalments.
How large that buffer should be depends on your fixed costs and how uncertain the payments are. The article on how much money a business should keep as a buffer goes into this further.
Sources
- Dutch Civil Code Book 6, articles 6:96, 6:119a and 6:119b, version in force from 16 July 2026 (in Dutch). wetten.overheid.nl
- Dutch Civil Code Book 2, article 2:397 (in Dutch). wetten.overheid.nl
- Ondernemersplein, Payment term, collection costs and statutory interest (in Dutch), checked 31 July 2025. ondernemersplein.overheid.nl
- Rijksoverheid (Dutch government), What is the statutory interest rate? (in Dutch), accessed 31 October 2026. rijksoverheid.nl
- BNA and Royal NLingenieurs, De Nieuwe Regeling 2025, legal relationship between client and architect/engineer (DNR2025), article 13 (in Dutch). nlingenieurs.nl
- Barrot, J.-N. (2016). Trade credit and industry dynamics: evidence from trucking firms. The Journal of Finance, 71(5), 1975-2016. doi.org
- Murfin, J. & Njoroge, K. (2015). The implicit costs of trade credit borrowing by large firms. The Review of Financial Studies, 28(1), 112-145. doi.org