New judgment: Compensation fee can be imposed on several invoices
The compensation fee was introduced in Denmark as part of an EU directive back in 2013. But despite this, few Danish companies still make use of the fee - and that's a shame. Now, a new ruling in this area may give an extra boost to its use.
Having bad payers costs money. Not only do you risk losing out on revenue if your invoices are not paid, but the administration of late payments also costs you extra time and resources in your accounting department. Back in 2013, a new EU directive allowed all European businesses to impose a so-called compensation fee of 310 € on all debtors who were traders.
As a debt collection company, we here at Collectia help many small and large companies with their debt collection, but we find that very few companies actually make use of the compensation fee. This is probably because very few companies know about it.
Now, a new High Court ruling has confirmed that Danish companies can impose the compensation fee on every single unpaid invoice they have against a debtor and not just one of them - as had previously been in doubt.
The ruling will hopefully help to refocus attention on the fee and its use.
The compensation fee in brief
Dealing with bad payers is time-consuming, whether you are a creditor, a lawyer or a debt collection agency - but the compensation fee helps to offset some of the extra costs you may incur when you have to reminder your customers for non-payment.
Unfortunately, very few businesses make use of the fee, and probably because very few people know about it. We therefore think you should know:
- The compensation fee is €310
- May be imposed immediately after the due date has passed and the invoice has not been paid
- Is independent of your other reminder fees
- It is not required that reminders have been sent in advance
- You can only impose a compensation fee on your business-to-business (B2B) customers
With the new judgment of the High Court, you should now also know that the compensation fee may be imposed on every single unpaid invoice a debtor may have, and not just one, which has been the subject of some doubt until now.
