Since 1 September 2023, Belgian legislation around unpaid or late paid invoices changed. You may no longer charge for the first payment reminder you send to your customer. What exactly changed for your SME and what new requirements do you have to comply with?

What exactly changed?

The first reminder letter is free: as a supplier, you can therefore no longer charge for the first reminder letter to customers that pay late. This new regulation is designed to protect consumers from non-payment or late payment of invoices and the unreasonable costs this entails. 

! Important remark: this legislation only applies to customers without a VAT number !

After a first reminder, customers have 14 days to pay. On a second reminder, suppliers are allowed to charge, but there is a ceiling on that amount.

Is the balance due less than or equal to 150 euros? Then you may charge a maximum of 20 euros in late fees.

For an amount between 150 and 500 euros, the maximum is 30 euros, with 10 percent of the amount owed on top. For example, if your customer has an overdue invoice of €500, you are allowed to charge €65 in late fees: €30 + (10% of €350).

If the amount exceeds €500, it becomes €65 and 5 percent on the amount exceeding €500, with a maximum of €2000. For an overdue invoice of €1000, that means a late fee of €90: €65 + (5% of €500 (because it exceeds the €500 with €500)).

For new contracts, these new rules will apply from 1 September 2023. For contracts before 1 September, you still have until 1 December to amend them.

What should your company do?

Update your general terms and conditions

Take the time to thoroughly review your general terms and conditions and adjust them where necessary. Clearly state that the first reminder is free of charge. If you don't, you won't be able to recover any of the extra costs.

This is the text you can put in your terms and conditions:

In case of lack of complete payment by the customer within 14 calendar days (+ three working days if not done electronically) after sending the first payment reminder, a compensation will be due by operation of law and without further notice:

€20 if the amount due is lower than or equal to €150; 

€30 increased by 10% of the amount due above €150; 

€65 increased by 5% of the amount due above €500, with a total limit of €2,000.

In case of lack of complete payment by the customer within 14 calendar days (+ three working days if not done electronically) after sending the first payment reminder, the customer will owe, by operation of law and without further notice, an interest amounting to the legal interest rate for late payment in commercial transactions, as per Article 5, paragraph 2 of the law of August 2, 2002, concerning combating late payment in commercial transactions. These interests will be calculated on the remaining amount to be paid.

Also adjust the points in your contracts that refer to fees, late payment interest and other recovery issues to be in line with the new legislation.

Disclaimer= Teamleader does not offer legal advice, and in the end you as our customer still have final responsibility to implement the changes and to check if everything is correct according to the new legislation.

Communicate to your customers

Inform your customers of the changes in payment terms and what happens if they do not pay. Transparent communication prevents misunderstandings.

Moreover, there is no legal basis for late fees if the terms have not been updated.

Therefore, also let them know that after receiving a first reminder, they have 14 days to pay. Do you need to send a second reminder after that period? Then you are allowed to charge a (limited) fee.

What happens if you do not amend your terms and conditions?

If you do not adapt your terms and conditions to the new regulations, you cannot demand interest or take collection steps. You also risk checks and penalties from the economic inspection.

So update your terms and conditions in time, notify your customers and protect your business from unnecessary costs and legal problems. Not only are you legally obliged to follow these new rules, it is also essential for maintaining a healthy cash flow and business operations.

Prevention is better than cure

But of course, in an ideal scenario, your customer always pays on time and you never have to fall behind on payments. So with Teamleader Focus, we try to make that process as efficient as possible.

How? Among other things, by facilitating online payments with our software. That way, invoices are paid up to 14 days faster and 37% more on time. If you put a QR code on your invoice, you will be paid on average 3 days faster than without a QR code!

Has the payment period passed and you still haven't received your money? Then - apart from on your first reminder - you can still deduct interest and late fees. One less thing for you to worry about.

Does your invoice still remain unpaid? Then you can forward your invoice to a collection agency via an integration in Teamleader Focus.

Automatic settings in Teamleader Focus

With Teamleader Focus we want to help you follow this new legislation. That's why we've added two settings to help you out to automatically cap your late fees or to calculate interest based on the first reminder date instead of the invoice overdue date.

Important to note is you'll only find these sliders in your account if you have at least one Belgian company entity.

Find the sliders by following these steps:

  1. Go to Settings > Company information
  2. Click on the pencil next to the company entity
  3. Go to Payment information
  4. Below the interest and the late fees fields you'll find these sliders:
    • Limit late fees based on the due amount for customers without VAT:
      This setting has to do with the above mentioned capping of the calculated late fees. So, if this setting is enabled, and 14 days has passed since the first reminder, then the late fees are applied to the invoice but automatically don't exceed the limits mentioned above:
      • €20 if the amount due is less than or equal to €150;
      • €30 plus 10% of the amount due on the tranche between 150.01 and 500 euros if the amount due is between 150.01 and 500 euros;
      • €65 plus 5% of the amount due on the tranche above €500, with a maximum of €2000 if the amount due exceeds €500.

        ==> If the expected sum violates the limit, then the late fees are adjusted to the maximum possible amount according to the due amount
        ==> If 14 days have not passed, the late fee is not applied
    • Calculate interest based on first reminder for customers without VAT:
      Usually we calculate interest on invoices the moment they are overdue, looking at the invoice overdue date. According to the Belgian legislation for customers without a VAT number however, we need to calculate the interest after 14 days from the first reminder date instead of the invoice overdue date. The customer should have 14 days to pay the first invoice reminder. So enabling this slider means:

      • Interest is calculated only after 14+1 days after the first reminder date. To keep in mind: when you send the reminder electronically, this period starts on the calendar day following the day of sending. If you notify the consumer by post, the period starts on the third working day after sending.

      • For automatic reminders the interest is calculated automatically. For manual reminders, you can click the button Incasso on an invoice where you'll find the date the consumer received the reminder. This date can be overridden manually.

Automatic reminders

Be sure to check the settings of your automatic reminders as well, especially if you've applied interests and/or late fees. These reminders will still be sent and costs will still be charged if you don't disable these.