The usual three stages
Three stages aren't required by law, but they've proven themselves because they give the client relationship room to breathe.
- Payment reminder: friendly, a few days after the due date. Often the invoice was simply overlooked.
- Second notice: factual, with a new deadline (e.g. 7 days) and a reference to late payment.
- Final notice: firm, announcing the next steps (court payment order or collection agency).
Template: payment reminder
“Hi [Name], this probably slipped through the cracks: invoice [number] dated [date] for [amount] has been due since [date]. I'd appreciate payment by [date]. If it crossed with this message, please disregard.”
Template: second notice
“Hi [Name], I still haven't received payment for invoice [number] for [amount]. Please transfer the amount by [date]. If there's an issue with the work or the invoice, let me know and we'll find a solution.”
Template: final notice
“Dear [Name], despite a reminder and a notice, invoice [number] for [amount] remains unpaid. I'm setting a final deadline of [date]. If payment isn't received by then, I'll start legal collection proceedings, which will cause further costs for you.”
Late fees and interest
In Germany, once a client is in default you may charge interest: 9 percentage points above the base rate plus a €40 flat fee for business clients, 5 points above the base rate for consumers. Dunning fees must reflect actual costs, usually a few euros. You can't charge for the first reminder that triggers default.
Avoid notices instead of writing them
The fewest notices are written by those who make sure the budget is in place before the work starts. Split large projects into phases, agree a deposit, or have each phase's budget secured before you begin. Then you'll only ever chase small amounts, never the whole sum.