Many entrepreneurs are unaware of how German law regulates payment of invoices. Especially payments by wire transfer raise many doubts, so we will try to dispel them.
According to the German legislature, the principal has 30 days from the date of receipt of the invoice to execute the transfer and this is regulated by the Civil Code (BGB §286). However, when it comes to invoicing, the law distinguishes between two groups of customers – companies and individuals. It can be assumed that a client who is a company knows the 30-day payment term when issuing an invoice and it is not necessary to include such information in this case on the invoice, but a private client must be clearly informed about the payment terms on the contractor’s invoice.
However, 30 days from the date of the invoice to receipt of the transfer is a long time, so many entrepreneurs are wondering if this period can be shortened. Of course, this is as possible, but both the principal and the contractor must agree on the payment term between themselves, for example, the payment term may be 10 or 14 days. Then the invoice must include information about the payment deadline, which has been shortened, so that if the invoice is not paid, you have a legal basis for initiating enforcement proceedings.
