Billing fee

A billing fee is a fee that a business can charge for issuing an invoice to an individual or another business.

The use of the billing fee is often seen in subscription businesses or companies that have recurring charges, such as utility companies, telecom companies or similar.

The fee is therefore an extra cost for the customer and an extra revenue for the company. However, most businesses will argue that the fee is imposed because sending invoices is an expense.

A billing fee is also called a payment fee, invoice fee or collection fee in some legal contexts, but they are the same thing.

Why work with billing fees?

If you run a subscription business or other business where customers are billed on a monthly basis, you will typically want payment to be as easy as possible. This often means payment via credit card, direct debit or PBS, as the reconciliation of payments is more or less automatic.

As a result, payment administration is often minimal and the company does not need to spend time or resources on generating an invoice, sending it out or manually following up on whether the invoice is paid on time.

The invoicing fee should therefore be seen as a fee that compensates for the manual or extra work involved in issuing an invoice.

How much can you charge in invoicing fees?

There are no legal limitations on the size of a billing fee, as there are for reminder fees, for example.

However, according to the Consumer Ombudsman, "a fee must not be unreasonably high in relation to the service that the fee covers." Therefore, the company can basically charge whatever billing fee suits them, as long as it is not unreasonably high and it is agreed and presented to the customer prior to the purchase.

Most invoicing fees are somewhere between 50 and 100 kroner.

How to avoid a billing fee?

The vast majority of companies that charge an invoicing fee often encourage their customers to register the invoice with PBS/Betalingsservice to avoid the fee.

However, there are also a small handful of companies that continue to charge billing fees even when there are no other payment alternatives. However, this is a small number.