With this commercial debt collection step-by-step plan you take the right steps to get paid.
Commercial debt collection is inevitable for many entrepreneurs. You have performed work or sold goods, but payment is outstanding. Unpaid invoices directly affect your liquidity and cost unnecessary time and energy. Still, many entrepreneurs wait too long to take action.
In this article, we explain step by step how commercial debt collection works, what options you have, and when legal action makes sense.
When is commercial debt collection appropriate?
Commercial debt collection applies when:
- you trade with another business;
- you have delivered correctly;
- the invoice is due and payable;
- payment is missing without a valid reason.
This may concern a single unpaid invoice, but also structural non-payment.
Why entrepreneurs wait too long to start collection
Many entrepreneurs postpone collection because they:
- do not want to damage the relationship;
- assume payment will come by itself;
- do not want legal hassle;
- fear costs.
In practice, we see that acting quickly and professionally actually increases the chance of payment.
Step 1: Check your legal position
Before you start a commercial debt collection, it is important to assess your position.
Answer, among others, the following questions:
- is there an agreement or assignment?
- was the work performed correctly?
- is the invoice correct and due?
- do general terms and conditions apply?
If these basics are in order, you will generally have a strong case.
Step 2: Send a clear payment reminder
The first step in a collection trajectory is often a written payment reminder.
It should state:
- the outstanding amount;
- the invoice date;
- a concrete payment term;
- the consequences if payment is not made.
Remain businesslike and factual.
Step 3: Notice of default (ingebrekestelling)
If payment still does not follow, a notice of default usually follows. This is a formal letter in which you give the debtor a final opportunity to pay.
A proper notice of default (ingebrekestelling):
- is in writing;
- refers to the agreement;
- sets a clear deadline;
- announces next steps.
This stage often already leads to payment.
Step 4: Legal collection
If payment still does not follow, legal collection can be started.
This means that a lawyer formally holds the debtor liable. Experience shows that this often exerts sufficient pressure to enforce payment without court proceedings.
Step 5: Court proceedings
If legal collection also does not lead to payment, court proceedings may follow.
In such proceedings you can claim:
- payment of the principal;
- statutory interest (wettelijke rente);
- collection costs (incassokosten);
- litigation costs (proceskosten).
Many cases are still settled before a hearing.
What if the customer disputes the invoice?
A frequently used defence in collection matters is that the invoice is disputed.
As explained in our article disputed invoice, this does not automatically mean that payment may be refused.
Commercial debt collection involving international customers
With foreign debtors, commercial debt collection is more complex. Different legal systems and language barriers play a role.
Read more about our approach to international debt collection in the Netherlands.
Common mistakes in commercial debt collection
- waiting too long to act;
- not sending a notice of default;
- communicating emotionally;
- not gathering evidence;
- giving up on legal steps too quickly.
What can Arslan Advocaten do for you?
Arslan Advocaten supports entrepreneurs with commercial debt collection. We assess your case, determine the right strategy, and guide the entire collection trajectory.
Also read more about our work in business law and in situations of not paid for delivered work.
Costs and litigation funding in commercial debt collection
In commercial collection matters we generally do not work on the basis of free legal assistance. A careful legal approach is essential.
However, this does not mean you must bear these costs yourself. In many collection cases, litigation funding (procesfinanciering) is possible.
We work with an independent litigation funder (procesfinancier) who—after substantive assessment—may decide to:
- pay all attorneys’ fees;
- pay the griffierecht (court filing fee in the Netherlands);
- cover any expert costs.
If litigation funding is granted, you as the client pay nothing in the end. The litigation funder bears the full financial risk.
The litigation funder only receives a fee upon success. For you, this means you can recover your money without financial risk.
About the author
This article was written by Onur Arslan, lawyer and founder of Arslan Advocaten. He assists entrepreneurs in collection and payment disputes.
Do you want to know how likely it is that your claim will be recovered?
👉 View Onur Arslan’s profile and get in touch immediately.
Read also
- International debt collection in the Netherlands
- Bankruptcy of a contracting party: what are your rights as an entrepreneur?
- Directors’ liability in bankruptcy: when is a director personally liable?
Frequently asked questions
When is commercial debt collection appropriate?
Commercial debt collection is appropriate when you are dealing with another business, have delivered correctly, the invoice is due and payable, and payment is missing without a valid reason. It can concern one invoice or structural non-payment.
What is the first step in the collection trajectory?
The first step is to send a clear payment reminder in which you state the outstanding amount, the invoice date, a payment deadline, and the consequences if payment is not made. It is important to remain businesslike and factual.
When is a notice of default needed?
A notice of default is needed if payment is missing after the reminder. It is a formal letter in which you give the debtor a final chance, with a clear deadline and a reference to the agreement.
What should I do if the debtor disputes the invoice?
If the debtor disputes the invoice, this does not automatically mean you cannot collect. You can still take steps, but it is important to assess the dispute carefully and, if necessary, seek legal advice.
More information about collection can be found on the government website.
