Getting paid on time
Late payment quietly drains Europe's smaller firms. The rules are tightening, but the best protection is still good housekeeping.
A profitable company can still run out of cash. One of the most common reasons is simple: customers pay late. The European Commission has estimated that one in four bankruptcies in the EU is caused by invoices not being paid on time.
The rules in Europe
The EU Late Payment Directive of 2011 sets the framework. Between businesses, payment should be made within 60 days unless expressly agreed otherwise and not grossly unfair; public authorities should normally pay within 30 days. Late payers owe statutory interest of at least eight percentage points above the reference rate, plus a fixed €40 for recovery costs. The Commission proposed a stricter regulation in 2023, but it has not been adopted.
Practice varies by country. The Banque de France's observatory reported an average payment delay of 13.4 days in France at the end of 2025, slightly better than a year earlier. German businesses generally pay faster, but delays still occur.
Change in the United Kingdom
In May 2026 the UK government introduced the Small Business Protections Bill to Parliament. As announced, it would cap payment terms for large companies at 60 days, make interest on late payment mandatory, and give the Small Business Commissioner powers to investigate and fine. The government estimates that late payments cost the economy £11 billion a year and lead to 38 business closures every day. The Bill is still going through Parliament, so details may change.
What a company can do today
The law helps, but most of the protection lies in daily practice. Clear payment terms agreed before the work starts. Correct, complete invoices sent promptly, because an invoice with an error is an invitation to delay. A weekly look at who owes what. A polite reminder on the first day an invoice is overdue, not the thirtieth. And a short cash forecast for the next twelve weeks, so there are no surprises.
This is an area where modest digital tools pay for themselves quickly. Accounting software that sends invoices and reminders automatically, and a simple dashboard of overdue amounts, can shorten payment times without any change in customer relationships. Collecting on time is not unfriendly. It is part of running a reliable business, and good customers respect it.
Questions to ask yourself
- How many days, on average, do your customers take to pay?
- What share of your invoices needs correcting before it is paid?
- Who sends the first reminder, and on which day?
- Could you see your cash position twelve weeks ahead?
Sources
- European Commission, 'Questions and Answers: Late Payment Regulation', 12 September 2023. ec.europa.eu
- Directive 2011/7/EU on combating late payment in commercial transactions, EUR-Lex. eur-lex.europa.eu
- Banque de France, 'Le rapport annuel 2025 de l'Observatoire des délais de paiement', 24 September 2026. www.banque-france.fr
- Department for Business and Trade, 'Largest crackdown on late payments in over 25 years as landmark Bill enters Parliament', 19 May 2026. www.gov.uk
Published 1 October 2026 · © 2026 Habsburg Digital Ltd