Everything you need to know about invoices and bills
A bill, also known as an invoice, is an important part of any transaction. It documents a payment for goods or services between a customer and a supplier. But what should a bill contain and can a bill be time-barred? In this article, we answer the most common questions about invoices, payment and what happens in the event of death.
What is a bill?
A bill is a formal collection of money for goods or services. It typically states a payment deadline, also known as the due date, which specifies when payment is due. Bills can be one-off, like when you buy a product, or recurring, like when you pay rent, subscriptions or insurance.
What information should a bill contain?
According to legislation, an invoice must contain the following information:
- Invoice number
- Recipient name and address
- Description of the product or service and price
- The total amount and any discounts
- VAT rate and total VAT amount
- Information about the sender, such as CVR number and company name
- Invoice issue date and payment deadline
These elements ensure transparency in the transaction and enable both buyer and seller to keep track of payments.
VAT and bills
VAT is a government tax that normally accounts for 25% of the price of goods and services in Denmark. The amount of VAT must be clearly stated on the invoice so that it is clear to the customer how much of the payment is VAT.
How to pay a bill
Bills can be paid in several ways. You can receive them either physically or digitally, and payment can be made either by bank transfer or cash. For recurring bills, such as rent, it can be a good idea to sign up for Betalingsservice (PBS). This way, the amount is automatically deducted on the payment date and you avoid reminder fees for missed payments.
Can I pay a bill in cash?
Yes, in many cases you can pay a bill in cash. However, there is a limit of DKK 20,000 that companies cannot exceed for cash payments. If your bill exceeds this amount, you must make the payment digitally.
Bill statute of limitations - when can a bill become time-barred?
Bills can become time-barred if the creditor has not recovered the outstanding amount within a certain time frame. As a general rule, regular bills are time-barred after three years, while loans and other debts can have a longer limitation period of up to 10 years if a debt agreement has been signed. However, the statute of limitations can be interrupted if you acknowledge the debt or the creditor takes the matter to the bailiff court.
Consequences of not paying bills
If you fail to pay your bills, you may be registered in debt registers such as RKI, Debitor Register and Debitor List as a bad payer. This can have major consequences for your personal finances as it will make it difficult to borrow money or enter into other financial agreements in the future. In the worst case scenario, the case can end up in the bailiff's court, where you may be forced to sell valuables to cover your debt.
Handling bills in the event of death
When a person passes away, decisions need to be made about what to do with their payment agreements and any debts. When the bank receives notification of the death, the deceased's accounts are automatically blocked and payments are suspended until a probate certificate is issued.
As the heir, you must first and foremost make sure that the creditors are informed. The proclamation, which is an official notice of death, is published in the Official Gazette. This gives creditors a deadline of eight weeks to make a claim for payment of outstanding amounts.
The most important thing about bills
Bills are a central part of both personal and business finances. They serve as documentation for the purchase of goods or services and must meet certain legal requirements. Payment can be made digitally or in cash, but cash amounts must not exceed DKK 20,000. Bills can become statute-barred if not paid and upon death, heirs must handle payments correctly through the probate court.
