Late invoice payments can hurt a business’s cash flow. What can be done about this? What’s the timeframe for collecting payment on invoices sent to individuals in France? What about invoices sent to businesses? How much time do you have to take legal action in case of an unpaid invoice? Let’s look at how long you have to claim settlement on invoices sent to businesses and consumers.

What’s in this article?

• What does the statute of limitations mean for invoices?
  
• What is the statute of limitations for invoices?
  
• When does the statute of limitations start running?
  
• Can the statute of limitations be interrupted or paused?
  
• What options does a business have once the statute of limitations expires?
  
• Notifying creditors of time-barred invoices
  
• For how long must you keep invoices?
  

What does the statute of limitations mean for invoices?

The statute of limitations for an invoice is when no legal action can be taken to collect the debt. After this time, the creditor – whether a consumer or a business – can no longer take legal action to recover the unpaid amount from the individual or entity that owes the money. In France, the statute of limitations for invoices is two or five years, depending on the type of transaction.

The limitation period cancels a debt and prevents it from being claimed indefinitely with large penalties. This is why issuers must carefully track settlements and send reminders for unpaid invoices.

You can avoid the statute of limitations for any type of invoice by using Stripe Invoicing, a billing solution that works with your existing tools and makes it simple to create invoices, automate revenue tracking, and speed up payments – no coding required.

What is the statute of limitations for invoices?

In France, the statute of limitations for invoices depends on the type of debtor (businesses vs. individuals) and the type of transaction involved. Typically, the period is:

• Two years for invoices issued to individuals – this is called the civil statute of limitations
  
• Five years for invoices issued from one business to another – this is the commercial statute of limitations
  

The timeframe is different in some specific cases:

• One year for telephone or internet services
  
• Three years for rental fees and unpaid rent
  
• Five years for condominium charges
  

When does the statute of limitations start running?

As a rule, the limitation period starts on the due date specified on the invoice – the date by which payment must be made, a required piece of information for all invoices in France. Typically, the payment deadline is 30 days from issuance, coinciding with when the goods are received or the service is completed. Sometimes, the period can extend to 45 days, but never exceed 60 days from the issue date.

For sales of perishable items, the settlement window shortens to 20 days from delivery.

Can the statute of limitations be interrupted or paused?

Yes. Article 2238 of the French Civil Code allows the statute of limitations to pause during mediation, conciliation, collaborative resolution, a simplified process for small claims recovery, a request for investigation, or a force majeure event. Once the pause ends, the limitation period resumes and runs for at least six months from the parties’ agreement.

In addition, some events can interrupt the limitation period – this is the case with debt acknowledgments, legal actions, court referrals before the deadline, or partial payments made by the debtor. A new period of the same duration starts running from the date of the interruption, cancelling the time that has already elapsed.

Sending a formal notice does not interrupt the statute of limitations.

What options does a business have once the statute of limitations expires?

It’s in a company’s best interest to take legal steps before the statute of limitations runs out. If it has expired, businesses might try to collect the payment through an out-of-court settlement. Settling an unpaid invoice out of court can take the form of:

• A reminder letter that must specify the due date, invoice number, amount owed, and both parties’ contact details
  
• A mutual agreement
  
• A payment plan to which the debtor agrees
  

Notifying creditors of time-barred invoices

Once an invoice is time-barred, the debtor can send a letter to the creditor and the debt collection agency stating that the balance is no longer enforceable. The letter must mention the invoice number and the expired statute of limitations and state that the debtor is no longer required to pay because the debt is time-barred.

For how long must you keep invoices?

Business-to-business (B2B) invoices must be kept for at least 10 years. For those sent to individuals, the timeframe depends on the type of transaction. To learn more about how long you need to keep invoices sent to individuals, read the dedicated article published by the French government.