Meanings of Reminder
A reminder is also known as a payment reminder. It serves to formally put a debtor in default. This can and must be done if the customer does not pay an invoice on time. The written form is not compulsory, but you should send a warning in writing for reasons of evidence.
What is a reminder?
According to TOPBBACOLLEGES.COM, a reminder is a payment reminder. You have to clearly ask the creditor to pay an open account. The customer can be threatened with legal action with the reminder if he does not comply with the payment request. However, it is contrary to custom to do this directly when the first reminder is issued. Writing a reminder is subject to certain conditions.
The basis is always an invoice that has already been issued. When writing an invoice, you set a payment term . If the debtor exceeds the deadline set by the obligee in his invoice, a reminder may be issued. If a debtor informs the creditor that he will not pay the bill, there is no need to write a reminder. However, you can and should issue a reminder for reasons of evidence. With the help of the bank interface, checking the open items is child’s play, so that you always have an overview of open and overdue invoices.
When do you send a reminder?
As a rule, you do not send a reminder immediately if the customer has not met his payment term and it has only just passed. Usually, a dunning letter is only sent if the debtor has not paid the invoice within 30 days of the end of the set payment term. Special software is available for monitoring the payment dates, which takes over the invoicing and checking of the payment dates.
In general, the first reminder does not charge any reminder fees or default interest. You should only charge dunning fees with the second reminder. Upper limits apply to the reminder fees, which are regulated depending on the district of the respective higher regional court. Depending on the respective federal state, different upper limits apply. More on the subject of “dunning costs” below.
What reminder fees can I charge?
In essence, the law does not recognize any item that is called “dunning fees”. It is only regulated that the obligee can assert damage caused by default in the event of non-payment. This damage caused by delay is made up of
- The cost of creating and sending the reminder
- Late payment interest.
late payment interest
The default interest that may be charged is regulated very precisely. A creditor may raise five points above the base rate on the day on which the debtor is in default. The base rate is set by the Deutsche Bundesbank and published on the Internet by special portals. The base rate is currently -0.88 percent. This means that a creditor is entitled to interest and invoice the amount owed at 5.88 percent.
Calculation example
100 euros are owed over a period of 30 days. Then the debt interest is calculated as follows: 100 * 0.0588 / 12 = 49 cents
Dunning costs and collection
When it comes to the costs of a reminder, the situation is not that clear. If the creditor himself sends a letter, he can only invoice the costs for paper and postage. In most cases, the dunning costs then amount to around 5 euros. On the other hand, it becomes more expensive for the debtor if the creditor engages a debt collection company. Because the costs that this company charges, the creditor can charge the debtor. This quickly adds up to three-digit dunning costs.
However, the costs for the debt collection agency may not exceed the rates that a lawyer may apply for the same service. Therefore, the reminder fees are closely based on the fee schedule for lawyers. In addition, the creditor must disclose in detail the costs incurred as a result of the reminder. So you cannot estimate a flat rate of 50 euros without actually incurring these costs.
How do you send a reminder?
You generally send a written warning, and you have to refer to the respective invoice. You can create a dunning letter using a form. Usually this is done with the company’s letterhead and a corresponding text. You put the debtor in default and should clearly communicate this fact. If you want to write a reminder, you can send it by registered mail and return receipt. So you have such evidence that and when you sent the reminder. As a rule, you send three reminders, two weeks apart, before taking legal action.
What else should you watch out for when dunning?
When writing a reminder, the creditor should always remember that the reminder is a customer. Even if it is annoying when people do not pay their bills – attacking, threatening or abusive does not help. Apart from a lost customer, nothing has been gained this way.
When choosing a suitable debt collection company, one should not be guided by emotional aspects, but rather discuss with the service provider exactly the “pace” with which they should proceed against their own customers.