The typical process
Late-payment interest: 5 percentage points above the base rate for consumers, 9 percentage points for business clients (§ 288 BGB, Germany). A formal demand is only required after the payment is due – there's no obligation to send a reminder beforehand.
- 1. Payment reminder (friendly): set a deadline, usually 7–14 days. Often it's an oversight, not a dispute.
- 2. First formal demand: more direct, referencing default and late-payment interest. Set a new deadline.
- 3. Final demand (warning notice): threatens a court payment order / formal dunning procedure. Sending by registered mail is advisable.
- 4. Court payment order (Mahnbescheid): filed with the local court (central dunning court); an informal process with low costs, which the debtor must reimburse if the claim is upheld.
- 5. Enforcement: once a claim is legally established, via a court bailiff.
What the dunning procedure costs and how long it takes
Compared with filing a lawsuit, the German court dunning procedure is cheap and fast – for example, on a claim of €5,000 the filing fee is roughly a low three-digit amount. Costs can be reimbursed if you win, but the process still takes effort and time. For amounts below certain thresholds, it's always worth weighing the options case by case.
Avoiding outstanding items in the first place
The most effective protection isn't the formal demand but the structure you set up beforehand: small payment stages with clear approval instead of one large final invoice on a 60-day term. With a milestone payment link like Stipme, the client secures the budget before the start, and payments are triggered by each approval – outstanding items simply don't arise.