Late payments happen in Dutch businesses, and Dutch law requires them to follow certain steps as part of the debt collection process. After Dutch businesses send an invoice and a legally viable follow-up reminder about late payment, they have the right to add collection costs, accrue interest, and pursue enforcement through the courts.

Below, we’ll explain what a debt collection invoice (“incasso factuur” in Dutch) is, what the law says about payment terms, and how to decide whether formal collection might be worth pursuing.

Highlights

• Businesses can add collection costs to an unpaid invoice on a sliding scale, but only after they send a formal reminder letter.

• Dutch law sets default payment terms, with different rules for B2B and B2C transactions.

• Winning a court judgment doesn't guarantee payment. Understanding the full collection process before you escalate helps you decide when formal collection is worth the cost.

What is a debt collection invoice?

A debt collection invoice is a formal request for payment of an outstanding debt. That debt can include the overdue invoice, interest, and additional costs. The Netherlands sets standard interest rates for unpaid invoices, which can be added after an initial reminder letter has been sent to the customer.

When can you charge collection costs on an unpaid invoice?

Businesses are entitled to add collection costs to an unpaid invoice once a customer is in default, but only after they send a written demand (“herinneringsbrief” in Dutch) that gives the customer 14 days to pay from the date on the letter. If the customer still doesn’t pay, the additional costs are calculated on a sliding scale:

• First €2,500: 15.0% of the outstanding amount, with a minimum of €40

• €2,501–€5,000: 10.0% on the amount within this range

• €5,001–€10,000: 5.0% on the amount within this range

• €10,001–€200,000: 1.0% on the amount within this range

• Above €200,000: 0.5% on any amount beyond this threshold

Statutory interest of 4.0% can also be accrued if the creditor requests it (or at a rate specified in the contract or general terms and conditions).

How do payment terms work under Dutch law?

The Netherlands has default payment terms of 30 days for B2B transactions, if no other terms have been specified. The terms can be extended to 60 days in rare cases. But B2C sales have no default payment terms.

How does the debt collection process work?

The debt collection process has a clear sequence. Each stage builds on the last so the paperwork you do early determines what you can claim later. The creditor can use a collection agency for this process.

Here are the steps:

• Reminder: Send a written reminder. This must give the customer 14 days to pay from the date on the letter and clearly state the amount of collection costs that will be added if they don't.

• Debt collection invoice: Once the 14-day deadline passes, send a debt collection invoice that includes the appropriate additional costs.

• Legal proceedings: With a court’s judgment, you can engage a bailiff, who can seize the debtor’s assets. (A collection agency cannot seize assets.) These can include a portion of their income or benefits, as well as their bank account, household effects, and potentially even their house.

What are the risks of pursuing debt collection as a small business?

Before you escalate, you should understand what that process involves. Keep the following in mind:

• Cost vs. recovery: Even a successful collection case takes time and money. Pursuing a €400 invoice through the courts might cost more in internal time than you'd recover, even after collection costs are added.

• Damaged relationships: Escalating to a formal collection process will likely end the business relationship. Sometimes, that's the right decision. But if you otherwise want to retain the customer, a direct conversation might resolve it faster.

• Enforcement isn't guaranteed: Winning a court judgment doesn't mean you’ll get paid. If the debtor has no assets or is insolvent, a bailiff might tell you there's nothing to recover.

• Statute of limitations: There’s a statute of limitations for invoicing. You must send an invoice within five years after the prescribed payment term has expired (or two years if you sell products to private individuals).

Is hiring a collection agency the right move for your business?

When customers don't respond and aren't genuinely disputing the amount on larger invoices, a collection agency might be right for your business. Standard collection agencies are well-suited to straightforward, undisputed debts. They handle the correspondence, legal notices, and often court filings, if it gets that far. The trade-off is control. Once you transfer a debt, the process moves at the agency’s pace, and the customer relationship is effectively over.

“No cure, no pay” arrangements are often offered for undisputed B2B debts, which means you pay only if they recover the amount. Check what happens to the debt if they don't. Some contracts assign the debt to the agency permanently.

A good way to reduce collection costs is to reduce how often you need to collect. Invoices that arrive late, contain errors, or go to the wrong contact get deprioritized—sometimes genuinely, sometimes as a delay tactic. You can avoid those excuses through good billing practices, such as sending invoices immediately on delivery with the correct details and a clear payment method.

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