Payment of an invoice by bank transfer - what you need to know

Many entrepreneurs are not aware of how German law regulates payment of issued invoices. Bank transfers in particular raise many questions, which we aim to clarify here.

Under German law, the debtor has 30 days from receipt of the invoice to make the transfer; this is regulated in the Civil Code (BGB § 286). When issuing invoices, the law distinguishes between two customer groups — businesses and private individuals. For business customers, one may assume the 30‑day payment term is known and need not be stated explicitly on the invoice; private customers, however, must be clearly informed of the payment terms on the invoice.

Thirty days from invoice date to receipt of payment is quite long, so many entrepreneurs wonder whether this period can be shortened. It certainly can, but the payer and the payee must agree a payment term — for example 10 or 14 days. The shortened payment term must then be stated on the invoice to provide a legal basis for enforcement if the invoice is not paid.