Why vague payment terms make your invoice legally useless and how to fix it
When a client doesn’t pay, the reflex is always the same: blame the client, blame the economy, blame the intern who sent the invoice late.
Let’s get real. The problem isn’t the payment delay, it’s your contract. Or more precisely, the absence of one that works.
You Sent the Invoice. You Waited. Nothing.
And now you’re refreshing your inbox, wondering how soon is too soon to send a reminder. Should you call? Will you sound desperate? How “pushy” can you be before burning the relationship?
Wrong question. If the invoice remains unpaid, chances are you’ve already lost the leverage — not because you’re not assertive enough, but because your legal groundwork is hollow. And in many cases, the client knows it.
Dutch Law Protects SMEs, If You Let It
Under the Dutch Wet late betalingen (Late Payments Act), large companies are legally required to pay SMEs within 30 days, unless otherwise, and fairly, agreed. That’s not a guideline. It’s the law.
If you're a small BV working with corporate clients, remember:
- 30 days is the default statutory term.
- Longer terms (60, 90 days) are only valid if explicitly agreed and not grossly unfair.
- If you blindly accept their general terms and conditions (T&Cs), you might be locked into something far less favorable.
This legal protection exists. But it’s not automatic. You have to activate it, in writing, in time, and with clarity.
GRC Breakdown: No Terms, No Teeth
Here’s what we routinely encounter during GRC audits of small enterprises:
- No contract at all, just emails and PDFs.
- General terms without any reference to payment deadlines.
- Ambiguous phrases like “payment within reasonable time” (spoiler: it means nothing).
- No mention of late interest, penalties, or suspension rights.
- Inherited templates with outdated clauses from a decade ago.
This isn’t just poor drafting. It’s a governance failure. A risk exposure. A compliance gap. You are effectively running your business on faith, not law.
Case Study: The Creative Agency That Got Played
We dealt with a Dutch design agency owed €18,000 by a major multinational client. After 60 days of silence, they started chasing, first politely, then legally.
Their lawyer asked for the agreed terms. The agency replied, “We usually expect to be paid within 30 days.”
Expectation ≠ obligation.
Worse: they had signed the client’s purchase terms, which included a 90-day clause. No pushback, no counter terms. They walked into a legal trap of their own making and the client knew it.
What Your Contract Must Say, Precisely
A contract isn’t decoration. It’s a shield. If you want to get paid on time and enforce your rights, your terms must include:
- Clear deadline: “Invoices are payable within 30 calendar days from the invoice date.”
- Interest clause: “Statutory commercial interest (wettelijke handelsrente) accrues automatically from the due date.”
- Collection costs: “All extrajudicial collection costs will be charged in accordance with the Dutch Collection Costs Act (Wet incassokosten).”
- Right to suspend: If invoices remain unpaid, you can pause work or terminate the deal.
- Priority clause: Your GTCs override the client’s, unless you explicitly agreed otherwise.
These aren’t optional footnotes. They are financial weapons. Use them.
The Most Common (and Fatal) Mistakes
Let’s list them clearly, because we see them every day:
- Sending “friendly” proposals instead of formal agreements.
- Accepting the client’s one-sided terms just to speed up onboarding.
- Assuming verbal agreements will hold up (they won’t).
- Failing to attach or reference your GTCs when sending an offer.
In Dutch law, if your terms aren’t explicitly included at the time of agreement, they don’t apply. And courts don’t give second chances.
Pro tip: Register your GTCs with the KvK or competent court, it gives you a timestamp and a traceable record.
Payment Terms Are Not Admin, They’re GRC Instruments
Still treating payment terms as a clerical afterthought? That’s your blind spot.
From a Governance, Risk, and Compliance (GRC) standpoint:
- Governance: Do you have internal standards for setting and enforcing payment rules?
- Risk: Are you letting clients dictate cash flow by failing to define terms?
- Compliance: Are you even aligning with statutory protections available to you?
Payment clauses are risk controls, not legal jargon. They dictate liquidity, operational continuity, and, ultimately, whether your business survives a tough quarter.
So What Can You Do Today?
If reading this made you think of three unpaid invoices sitting in limbo, take this as a call to clean house:
- Audit your contracts: If they’re missing payment terms, interest, or penalties, fix it now.
- Standardize your GTCs: Make sure they’re current, registered, and referenced in every quote.
- Assert your SME rights: If your client is a big player, don’t accept longer than 30 days unless it’s fair and fair means something you explicitly agreed to.
- Stop relying on reminders: If your terms aren’t enforceable, your reminders are just noise. Work with legal, not just accounting.
Final Thought: Contracts Aren’t Just Paper, They’re Power
If you want to get paid, don’t beg. Don’t threaten. Don’t escalate too late.
Just write better contracts.
Because in the end, the law doesn’t protect the most polite, it protects the most prepared.
Head of Compliance and Legal Department
Francesco Cattaneo is Head of Legal & Compliance at XTROVERSO™. A qualified Italian lawyer and CIPP/E-certified privacy expert, he bridges civil law, digital regulation, and strategic governance. His writing challenges the false divide between law and innovation, showing how clear rules, when well-crafted, are not limits but instruments of freedom, protection, and long-term design.