When can - and should - you send an invoice to debt collection?

Many companies - especially small and medium-sized businesses - experience at some point that a customer doesn't pay an invoice on time. For some, it's the first time they've faced this situation, so the question quickly arises: "When can I actually send a case to debt collection - and when should I do it?"

Knowing the rules and having a set process in place is crucial to avoid unnecessary losses and treat your customers correctly.

When can I send an invoice to debt collection?

There are three basic conditions that must be met before you can send a case to debt collection:

The payment deadline has passed
The invoice must be due. Typically, the due date is clearly stated on the invoice. Once this has passed, you can start the process.
Collection notice has been sent
A collection notice (often part of a reminder letter) must have been sent, giving the customer a new payment deadline of at least 10 days. Here you must clearly state that the case may otherwise be sent to debt collection.
The claim is not time-barred
Most invoice claims are time-barred after 3 years. However, if you have secured your claim through e.g. a judgment, debt declaration or voluntary settlement, the limitation period can be extended to 10 years.

Example: If you sent an invoice on March 1 with a due date 30 days later and the customer hasn't paid, you can send a reminder with a debt collection notice as early as April 1. If payment is still not made within 10 days of the letter being sent, the case is legally ready for collection.

When should I send a case to debt collection?

Just because you can send to debt collection doesn't always mean you should do it right away. Some companies want to give their customers a little extra time - but experience shows that quick action often yields better results.

Why time is of the essence

Prioritization among creditors: The debtor usually pays the creditors that move quickly first.
Bankruptcy risk: The longer you wait, the greater the risk of the debtor going bankrupt and you losing your entire claim.
Signaling value: Quick action shows that you know your business and take payment seriously.

Therefore, we recommend that you set an internal policy for when a case should be handed over. A good rule of thumb is 5-10 days after the debt collection notice has expired.

When can I not send to debt collection?

Even if a customer doesn't pay, there are situations where you can't or shouldn't send the case to debt collection:

The customer is in bankruptcy
In this case, you should instead contact the trustee in bankruptcy.

The customer has a justified objection
If the customer has made a justified objection, the case must first be investigated further. If you send it to debt collection, you must include documentation of the objection and your assessment of it. Ultimately, the case may end up in court.

The customer is under the age of 18
Minors cannot enter into credit agreements and therefore claims against persons under 18 cannot be sent to debt collection.

Who pays for the collection costs?

The short answer is: the debtor - as long as you as the creditor have complied with the rules.

As a creditor, you can for example

send up to 3 reminders with a maximum fee of DKK 100 each.
impose a collection fee of DKK 100 when the case goes to debt collection
charge a compensation fee of DKK 310 if your customer is a business or public authority

These rules are designed to cover part of your costs in pursuing the claim.

Can I send a case to debt collection myself?

Yes, you can try to collect the debt yourself. But this also means that you have to manage the entire process yourself - including correct letters, formalities and any legal proceedings.

Many businesses choose to use a professional debt collection company that has the experience, systems and processes to ensure everything is done correctly and efficiently.

Tips to prevent debt collection

While debt collection is an effective solution, it's even better to prevent cases from ending up there. For example, you can

Make clear agreements on payment deadlines in contracts and invoices
Send the invoice quickly after delivery
Follow up with a friendly reminder shortly after the due date
Use automated systems for reminder and collection management

A strict and professional credit policy sends a clear signal to your customers and can significantly reduce the need for debt collection.

At Collectia, we also offer Qatchr, which helps companies prevent losses through credit lookups, credit monitoring and continuously updated data. With Qatchr, you get insight into your customers' finances even before the agreement is signed - and can react quickly if a customer's ability to pay changes.

Should you send a case to debt collection?

If you have a non-paying customer, it can be difficult to know when it's the right time to escalate the matter.

At Collectia, we help companies every day with the collection of unpaid invoices. We have extensive experience with all types of debt collection cases and offer one of Denmark's most modern online platforms where you can create, follow and close your cases - when it suits you.