The payment conditions businesses in Germany set for or negotiate with their customers have a significant impact on the liquidity of their operations. They determine factors such as how much time customers have to settle their invoices, and when money is debited to the business’s account. A fundamental aspect of payment conditions is the payment due date.

In this article, we’ll explore what a payment due date is, how it differs from a payment term, and whether it qualifies as mandatory invoice information in Germany. We’ll also discuss which payment terms (e.g., shorter, extended) are commonly used in practice and how Stripe can help you manage payment due dates.

Key takeaways

• A payment due date is a specific date by which recipients must settle an invoice.
  
• Payment due dates and payment terms serve the same purpose, but define the deadline for payment in different ways.
  
• German businesses can negotiate payment conditions individually with their customers or establish fixed conditions in accordance with the statutory regulations.
  
• In practice, payment due dates and payment terms frequently differ in the B2B versus B2C sectors.
  
• Clear payment conditions simplify liquidity planning, dunning, and accounts receivable (AR) management.
  

What is a payment due date?

A payment due date is a concrete date by which an invoice must be paid. It establishes when an open invoice is due or when payment must be received by a creditor.

A payment due date is a key element of a business’s payment conditions and is generally indicated on an invoice. It therefore creates transparency for both contract parties. Invoice recipients can settle an open invoice any time prior to or on the payment due date. The issuer of the invoice is essentially granting their customer a limited payment deferral.

How are payment due dates set?

Payment due dates are either indicated in the contractual agreement between two parties or are stipulated by the invoicing business.

Businesses in Germany use agreed upon payment due dates to help them plan their incoming payments, while taking into account the interests of both parties. They can also make additional payment agreements for things such as advances, partial payments and installments, or early payment discounts.

A unilaterally defined payment due date is set by a supplier, without any prior individual agreement with customers. The payment conditions, including the payment due date, are usually set out in the quote, contract, or a broader set of terms and conditions (T&C).

What is the difference between a payment due date and a payment term on an invoice?

In the business world, the terms “payment due date” and “payment term” are frequently used interchangeably. Strictly speaking, however, they represent two distinct ways to describe when a customer must pay their invoice.

A payment due date establishes a specific date by which the invoice must be paid. A payment term, on the other hand, is a period of time within which a buyer must settle an invoice.

Examples of how to indicate payment due dates and payment terms on invoices

Businesses in Germany need to ensure that their payment conditions are clearly worded on their invoices, so that there is no confusion for customers as to when an invoice is due. The exact wording differs depending on whether a business wants to set a specific payment due date or a payment term.

When setting a payment due date, the wording usually contains a fixed deadline for payment:

• “Please debit the invoice total to the account indicated by August 31, 2026.”
  
• “Invoice total due no later than August 31, 2026.”
  
• “Payable in full by August 31, 2026.”
  

On the other hand, when setting a payment term, the wording refers to a specific period of time:

• “Payable within 14 days of invoice date.”
  
• “Payable within 30 days of receipt of invoice.”
  
• “Payable within four weeks of invoicing.”
  

Which wording is appropriate when?

In practice, the differences between a payment due date and payment term are minimal, since both ultimately define when payment is due. If, for instance, a 30-day payment term is agreed upon, this automatically establishes a specific payment due date. The main difference lies in how the deadline is conveyed.

A payment due date typically works best when a business wants to clearly communicate the exact deadline for payment. A payment term, on the other hand, works if the business wants the deadline to adjust based on the invoice date or receipt of the invoice. Which version a business uses is often about their internal processes, the agreed payment conditions, and the requirements for that specific business relationship.

Do invoices have to contain a payment due date?

German businesses are not obligated to always indicate a payment due date or payment term on their invoices. In principle, invoices are considered due upon receipt, unless alternative payment conditions have been agreed upon. The legal basis for this is the German Civil Code (BGB), in particular Section 271 of the BGB.

Additionally, if no individual agreements have been made, the statutory payment term defined under Section 286, Paragraph 3 of the BGB applies. According to this regulation, commercial invoices are considered late if they are not paid within 30 days of receipt and payment due date. This rule only applies to private individuals if the invoice contains an exact payment due date or payment term.

A late payment can also occur if a business duns the receivables it is owed. They can do this as soon as a customer misses the payment due date indicated on the invoice.

Why it makes sense to indicate a payment due date on an invoice

Even though it is not legally mandated in all cases, businesses must indicate clearly labeled payment due dates or payment terms on their invoices. Providing clear information creates transparency around when payment is due, and it reduces the risk of misunderstandings between the contract parties.

It also makes internal organization easier. Businesses can plan their incoming payments better and can systematically track open invoices. They can identify past due payments quickly and take corresponding measures, such as issuing payment reminders or dunning letters. This reduces the risk of default and can even improve the business’s liquidity.

Another advantage of setting a clear payment due date is that it improves the enforceability of open invoices. If no clearly definable deadline has been set, then there is no clear basis for a dunning procedure in the event of a dispute. This can create uncertainty around things like calculating default interest.

When does it make sense to define payment terms on an invoice?

In principle, businesses in Germany are free to set their own payment terms (e.g., net 30, net 60), as long as they are not in breach of any statutory or contractual regulations. In practice, they often use 30-day payment terms as a guide. However, they can also agree on individual terms that better suit their liquidity planning and business strategy. Businesses in the B2B sector frequently set longer or flexible payment terms, while shorter and clearly structured payment terms are more common in B2C.

Shorter payment terms

Businesses can choose to set shorter payment terms on their invoices in order to get paid faster. However, terms of, say, 14 days must be communicated in advance—in a quote, a contract, or the company’s T&Cs. It is particularly important to notify customers of extra short payment terms, such as seven days, prior to invoicing.

Businesses must reach agreements with their customers first, rather than surprising them with short payment terms on their invoices. Without a contract, shorter terms might not be legally binding. The phrase “Due immediately” means that the invoice is due as soon as it is received. However, this does not mean that the customer’s payment is automatically late if not made immediately.

Extended payment terms

In addition to shorter payment terms, businesses can also agree on extended payment due dates or payment terms. Terms of 60 days or more are not uncommon in B2B. They are typically part of individual contracts and payment agreements. Extended payment due dates give invoice recipients significant flexibility and can therefore have a positive impact on the business relationship. Extended terms are less common in B2C, since suppliers in this sector generally expect their invoices to be settled faster.

Start and end of payment term

The key to setting a payment term is deciding which event to link the term to (e.g., the invoice date, receipt of invoice, or delivery). In principle, the payment term begins either upon receipt of invoice or upon delivery of goods, if this occurs after invoicing. When sending invoices via mail, businesses must factor in delivery time. Invoices sent via electronic means are usually received immediately, hence receipt of invoice is often the same as the invoice date. However, this might not always be the case, such as if an email winds up in someone’s spam folder.

The payment term concludes at the end of the final day of the term. If this day falls on a Saturday, Sunday, or public holiday, the term concludes at the end of the following working day.

How Stripe Invoicing can help you manage your payment due dates

With Stripe Invoicing, you can generate and send invoices with the help of the tool’s configurable payment settings. Payment due dates and payment terms can be reflected on invoices according to your requirements quickly and easily.

Stripe Invoicing also helps you keep an overview of your incoming payments, allowing you to track payment due dates, manage open invoices centrally, and automate payment reminders and dunning letters. This simplifies your debtor and accounts receivable (AR) management, especially if you have a high volume of invoices.

At the same time, you can offer your customers more than 100 different payment methods, and processing in over 25 languages and 135 currencies. This boosts the flexibility of your payment process and makes it easier for international customers to settle their invoices quickly and without hassle.

FAQs about payment due dates

Below, you will find the most frequently asked questions around payment due dates on invoices in Germany.