Most entrepreneurs have experienced it before: you provide a service or product to the best of your ability, neatly send an invoice... and yet payment remains outstanding. The money you had factored in is suddenly "on hold". The frustration grows - especially if this happens more often - and you soon think: "Then I'll just charge interest." But is that really allowed just like that? The answer? Yes... and no.
Consumers: a free reminder first
Do you work with private individuals (B2C), then the law imposes clear ground rules. You may only costs or interest charge after you have a free reminder sent. This reminder still gives the consumer 14 calendar days extra to pay at no additional cost.
Note that this deadline does not always start at the same time. When sending via email start the counter the day after. Do it by post, then the legislator waits until the third working day after transmission.
Equally important: that reminder should be to strict substantive conditions comply. In practice, this is where things often go wrong. The reminder should specifically refer to the invoice in question and clearly state:
- That this is a first free reminder goes,
- the outstanding balance,
- the original due date,
- a description of delivery or purchase which led to the debt,
- and the exact reference of what costs and interest will follow in case of non-payment.
Are these conditions not respected? Then subsequent costs and interest are simply unenforceable. Tip: always attach the invoice to your reminder, that way there can be no discussion about what it is about.
If the consumer also fails to pay after that extra 14 days, you may dwellings charge - but never more than the statutory interest rate. For the first half of 2025, it is 11.5% per annum. In addition, you may also seek liquidated damages, but these are strict capped. Example: for an invoice of €500, you can charge a maximum of €65 extra. Anything above that is illegal and therefore invalid.
Entrepreneurs among themselves: more freedom
Between enterprises (B2B) the story is different. Here, as an entrepreneur, you have much more freedom to decide for yourself what interest and costs you charge. The condition is that this is clearly stated in your contract or general terms and conditions.
For example, you can agree that a late payment will automatically incur interest of 12% per annum produces, plus liquidated damages of 10% of the invoice amount, with a minimum of €50. If this is explicit in your terms and conditions, you can effectively claim those amounts.
However, have you not agreed anything? Then you fall back on the statutory interest rate for commercial transactions, which since January 2025 11,5% amounts. In that case, you may incur reminder fees only if real cost pass on, for example, the price of a registered letter.
Where does that difference come from?
The logic is simple: consumer are legally protected from excessive fees and vague clauses. Entrepreneurs among themselves get more freedom as the law assumes that both parties negotiate on an equal footing.
What is best to do as an entrepreneur?
Some useful tips:
- Work with clear and up-to-date terms and conditions. Specify specifically what percentage of interest you charge and how you calculate damages. No vague descriptions, but hard figures.
- Send reminders correctly. For consumers: free of charge and with all required information. For companies: at least a clear notice of default.
- Keep an eye on legal interest rates. These change every semester. Today it is 11.5%, but it could be different within six months.
In conclusion
Can you charge interest for late payment? Yes, absolutely. But the rules of the game differ greatly depending on whether your customer is a consumer or an entrepreneur. Anyone who simply sticks a percentage on top of an invoice without thinking risks the customer not having to pay those extra charges.
In short: if you want to avoid your efforts going unpaid, make sure you have watertight terms and follow the right procedure.
Doubting whether your billing terms are up to date? A quick check can save you a lot of discussion (and money) later.
Contact Bannister Lawyers via info@bannister.be or call 03/369.28.00.
