An unpaid invoice is frustrating, but it is not a reason for rushed or threatening messages. The safest approach is a documented process: check your own records first, communicate clearly, and only then choose the appropriate escalation. This guide concerns claims under German law and is not legal advice for an individual case.
1. Check the invoice, contract and payment status
Before contacting the customer, rule out an error on your side. Check at least:
- Are the business name, billing address and contact correct?
- Are the service, service date, invoice number and amount understandable?
- What does the contract, order or accepted quote say about payment?
- Can you prove that the invoice reached the customer?
- Is there a credit note, part payment or complaint?
- Could the payment have arrived with a different reference?
What matters is not only the wording on the invoice. Check whether a payment date or period was actually agreed or follows from the circumstances. A deadline appearing for the first time on the invoice should not automatically be treated as a contractual agreement. If no special rule applies, performance is generally due immediately under section 271 BGB. Acceptance, defects or counterclaims may matter for some contracts.
2. Send a friendly payment reminder
Soon after the relevant deadline, a factual reminder is often the best first step. An invoice may have been overlooked, sent to the wrong inbox or held up in an approval process. State the invoice, outstanding amount and a specific new date.
Sample payment reminder
Hello Ms/Mr …, we have not yet received payment for invoice no. 2026-123 dated 1 September 2026. The outstanding amount is EUR …. Please check the invoice and transfer the amount by 24 September 2026. If you have already paid or have a question about the service, a short message is sufficient. Thank you.
Use a channel you can document and retain the sending date and any reply. German law does not require a particular heading for a demand; what matters is an unambiguous request for the payment that is due.
3. Determine when the customer is in default
Default matters because default interest and further loss can depend on it. Under section 286 BGB, a debtor generally enters default after receiving a demand made once payment is due. There is no default while non-payment is caused by a circumstance for which the debtor is not responsible.
A demand may be unnecessary, for example where the contract sets a specific calendar date. For payment claims, default occurs no later than 30 days after the claim is due and the invoice has been received. For consumers, that 30-day rule applies only if the invoice expressly points out the consequence. An additional rule applies to businesses if receipt of the invoice is uncertain.
Do not rely on an exception too quickly. Document the due date and receipt and send a clear demand. This also makes the record understandable for a lawyer or court.
4. Write a clear demand for payment
If the reminder produces no result, the next message should be unambiguous. German law does not prescribe a sequence of first, second and third reminders. Relevant factors include the due date, receipt, demand and default.
Include:
- invoice number and date,
- outstanding amount and recorded part payments,
- relevant due date,
- a specific new payment deadline,
- bank details and payment reference,
- a contact for substantive objections,
- the next step you intend to take.
Sample demand
Hello Ms/Mr …, despite our payment reminder dated …, invoice no. 2026-123 remains unpaid. Please transfer the outstanding amount of EUR … to the account below no later than 1 October 2026. If you dispute all or part of the claim, please tell us the specific reason within this period. If the deadline passes without payment, we will consider further enforcement.
Stick to verifiable facts. Invented charges, public pressure or sweeping threats can create additional legal problems.
5. Check default interest and the EUR 40 lump sum
Where the debtor is in default, section 288 BGB governs statutory default interest. The standard rate is five percentage points above the base rate. For payment claims arising from transactions in which no consumer is involved, it is nine percentage points above the base rate.
The base rate is reset on 1 January and 1 July. Use the rate published by the Deutsche Bundesbank for each relevant period rather than a permanently stored figure.
For a payment claim against a debtor who is not a consumer, section 288 BGB also provides for a EUR 40 lump sum. It must not be added automatically against private consumers. Further enforcement costs are recoverable only when the legal requirements are met, and the lump sum is credited against compensation owed for such costs. Have the calculation checked if in doubt.
6. Address the customer's objections first
If the customer disputes the invoice, automatically forwarding it to a collection agency is usually not the best first step. Clarify:
- Which item is disputed?
- Is acceptance or evidence of performance missing?
- Is only part of the amount disputed?
- Was remedial work agreed?
- Can the undisputed amount be paid immediately?
Confirm telephone calls in writing and set a deadline for documents or a response. A justified correction or credit note is better than unnecessary escalation. If there is a serious dispute about the contract, defects or counterclaims, advice from a lawyer is generally more suitable than standard payment-order proceedings.
7. Agree instalments clearly and in writing
If the customer wants to pay but is temporarily unable to do so, an instalment plan may make commercial sense. Record the total claim, instalment amounts, dates, payment method, treatment of interest and costs, and the consequences of a missed instalment. Allocate every payment to the specific claim.
Consider the delay and risk of loss. For large amounts, doubts about solvency or unclear effects on acknowledgement and limitation, obtain professional review of the agreement.
8. Choose debt collection, a lawyer or court payment-order proceedings
If the claim is due, documented and not seriously disputed, three routes may be relevant:
Debt collection provider: useful if you want to outsource communication and recovery. Check the provider, fee model and registration in the official Legal Services Register.
Lawyer: appropriate for substantial amounts, legal objections, uncertain evidence, impending limitation or additional claims.
Court payment-order proceedings (gerichtliches Mahnverfahren): a simplified German procedure for monetary claims. The application can be prepared through the official Mahngerichte portal. When issuing the order, the court does not fully examine whether the claim exists. If the debtor objects, ordinary contested proceedings may follow. Without an objection, the creditor may apply for an enforcement order.
Keep limitation in view. The standard period is three years under section 195 BGB and, subject to section 199 BGB, generally starts at the end of the relevant year. An ordinary reminder or demand does not automatically suspend limitation. Service of a court payment order can suspend it under section 204 BGB. Seek legal advice early if time is short.
9. Prepare the enforcement file
Keep ready:
- contract, order or accepted quote,
- evidence of performance, delivery and acceptance,
- invoice and evidence of receipt,
- bank statements and part payments,
- reminders and demands with sending dates,
- emails, call notes and complaints,
- a transparent calculation of interest and costs.
Office software can keep deadlines, receivables and documents together. It cannot replace checking the claim or obtaining legal advice.
10. Short checklist
- Check payment, contract, invoice and due date.
- Send and document a reminder with a specific date.
- If payment is still missing, make an unambiguous demand.
- Check default, interest and any lump sum correctly.
- Separate objections from undisputed partial amounts.
- Agree instalments only clearly and in writing.
- Check limitation; reminders do not automatically suspend it.
- Select collection, a lawyer or court proceedings to fit the claim.
Sources and legal notice
Reviewed sources: section 271 BGB — time for performance, section 286 BGB — default, section 288 BGB — default interest, sections 195 and 199 BGB — limitation and section 204 BGB — suspension through legal action. See also the Deutsche Bundesbank, Mahngerichte and Legal Services Register.
Reviewed on 14 September 2026. This article provides general business information, not legal advice. Seek professional legal advice for disputed, substantial or nearly time-barred claims.