The invoice has been issued, the payment deadline has passed, and the transfer still has not arrived. Many business owners react by waiting, so as not to damage the relationship with the other side. The trouble is that a month later the relationship is usually weaker anyway, and the money is still missing.
In that situation it pays to work through it in order. Below are four steps that let you assess the matter, secure the evidence and decide whether a payment demand will do, or whether you have to go to court.
Step 1. Work out the limitation period before you do anything else
This is the first thing to check. Limitation can close off any effective pursuit of the debt, even where the invoice is entirely justified.
Under the general rule, claims connected with running a business become time-barred after 3 years. The limitation period usually ends on the last day of the calendar year, unless a specific provision lays down a period shorter than 2 years.
And this is exactly where the problem most often arises. In many cases the 3-year period does not apply at all, but a shorter special period does, for example:
- Sale of goods within the scope of the seller’s business: 2 years.
- Mandate contracts and certain services: 2 years.
- Contract for specific work: 2 years from delivery of the work, or, if the work was not delivered, from the day on which it was to be delivered under the contract.
- Carriage: as a rule 1 year. With a period this short, the rule moving the end of limitation to the last day of the year does not apply, because the period is shorter than 2 years.
The difference can be expensive. An invoice for construction works due in March 2023 may become time-barred on 31 December 2026. An invoice for the sale of goods with the same due date - already on 31 December 2025.
The same date on an invoice does not always mean the same limitation period. First check which contract the claim arises from.
Step 2. Establish what you are actually dealing with
Before you send a payment demand, answer one question: does your business partner have a liquidity problem, or is this a dispute about whether the claim is justified at all?
If the other side goes quiet, apologises or promises yet another payment date, it is usually liquidity. What counts then is a fast response and a clearly drawn line.
If, however, objections suddenly appear about quality, the scope of the work or the way the contract was performed, the matter starts to look different. This may be a dispute in which the evidence has to be secured from the outset: the contract, the order, the handover protocol, the correspondence, photographs, confirmations that the service or delivery was performed.
After every phone call, send the other side a short summary by e-mail. One sentence is enough: “I confirm that in today’s call we agreed on payment by…”. What was said on a call can also serve as evidence, but witness testimony is unreliable and taking it is time-consuming. An e-mail exists immediately and is far harder to undermine later.
Step 3. Send one payment demand that actually carries weight
A reminder generated by an accounting system tends to be ignored, because it often does not say what happens next. A good payment demand should contain four elements.
- A specific amount and its basis. State the invoice number, the principal amount, the interest and the basis on which the debt is being pursued.
- A deadline. Most often 7 days from service of the demand, preferably with a specific payment date.
- Notice of the consequences. Say plainly that non-payment will result in the matter being taken to court without further demands.
- Proof of service. Send the demand in a way you can later prove: by registered post, by recorded delivery, or by e-mail with delivery confirmation to the address given in the contract or used in earlier correspondence.
Calculate the interest and the compensation. They may be due by statute
In commercial transactions between businesses you can claim statutory interest for late payment in commercial transactions. It is higher than ordinary statutory late-payment interest under the Civil Code, so it is worth claiming the right interest rather than filling in whatever your usual template says.
On top of that there may be fixed compensation for the costs of recovering the debt. Its amount depends on the value of the payment due:
EUR 40 - where the payment does not exceed PLN 5,000,
EUR 70 - where the payment is higher than PLN 5,000 but lower than PLN 50,000,
EUR 100 - where the payment is PLN 50,000 or more.
The compensation is converted into zloty at the average euro rate published by the National Bank of Poland on the last working day of the month preceding the month in which the payment fell due.
Step 4. The claim - sooner rather than later
If the payment demand produces no result, waiting longer usually makes things worse. A company that is not paying you may not be paying others either. A queue of creditors forms around the debtor’s assets, and the later you start, the greater the risk that there will be nothing left to enforce against.
In order-for-payment proceedings the court may issue an order for payment without a hearing. If the documents are stronger - for example you hold an accepted invoice, an acknowledgement of debt, a promissory note or other documents required by the regulations - writ-of-payment proceedings may be available. Such a writ offers wider scope for securing the claim at the very start of the case.
In simple cases the electronic order-for-payment procedure (EPU) is also worth considering. It carries a lower court fee, but it will not be the best choice in every case. If you expect a dispute over quality, the scope of the work or the very basis of the claim, an ordinary statement of claim may be more appropriate.
And one thing that is often forgotten. A final order for payment or judgment is not yet money in the account. It is only the basis for the next step. First an enforcement clause has to be obtained, and only then can the case go to a court bailiff.
In short
- Work out the limitation period first. For many invoices it is 2 years, not 3.
- Check whether you are dealing with a liquidity problem or a dispute over whether the claim is justified. That changes the strategy.
- Confirm phone calls by e-mail.
- Send one specific payment demand: with a deadline, the amount, the interest, the compensation and notice that a claim will follow.
- Do not wait indefinitely. Thirty days after the due date you should know whether the matter will end amicably or whether a claim has to be prepared.
This article is for information only and does not constitute legal advice. Assessing a specific case requires reviewing the documents.