When an invoice is due
If you agreed on nothing, your money is due immediately. That is § 271 (1) BGB: if no time for performance is set, the creditor can demand it at once. Payment terms are therefore a courtesy to your customer. They move the due date to a later day, before which you cannot press for payment (§ 271 (2) BGB).
Payment terms are clearest when you agree on them in the quote or the contract, see how to write a quote. If they appear only on the invoice, they are a one-sided statement. They still help with the due date, because your customer knows when you expect the money. What they mean for default is further below.
7, 14 or 30 days are common on invoices. As a freelancer, short terms usually suit you better: you have already done the work, and every week of waiting is a week you finance.
How long payment terms may be
Large customers sometimes ask for 60, 90 or 120 days. § 271a BGB sets limits when your customer is a business or a public body:
| Customer | Payment terms without more | Longer only if | Basis |
|---|---|---|---|
| Business | up to 60 days | expressly agreed and not grossly unfair to you | § 271a (1) BGB |
| Public client | up to 30 days | expressly agreed and objectively justified, never over 60 days | § 271a (2) BGB |
| Private person | no limit under § 271a BGB | § 271a (5) BGB |
The period runs from receipt of your service or, if the invoice comes later, from receipt of the invoice. Terms that are too long are void, while the rest of the contract stands. The limits do not apply to partial and installment payments (§ 271a (5) BGB).
If long payment terms are in your customer’s purchasing conditions, one more rule applies: in standard business terms, payment terms over 30 days are in case of doubt unreasonably long (§ 308 No. 1a BGB). Do not let that pressure you, and negotiate if the period is too long for you.
Deposits and partial payments
For larger projects you do not have to wait until the end. Agree on a deposit at project start or partial payments at milestones. The limits of § 271a BGB do not apply to such partial and installment payments; they depend only on your agreement. What the invoices for them look like is in the guide to partial and final invoices.
Payment terms and default
Due and in default are two steps. Only from default may you charge interest and costs. Under § 286 (3) BGB your customer is in default at the latest 30 days after the due date and receipt of the invoice, even without a reminder. With private customers this applies only if the invoice points out this consequence. A sentence that does so, in German as your customer reads it:
Sie kommen ohne weitere Mahnung in Verzug, wenn Sie nicht innerhalb von 30 Tagen nach Fälligkeit und Zugang dieser Rechnung zahlen.
Your customer is in default earlier after a reminder sent after the due date, or if you agreed on a fixed payment date. Payment terms that appear only on your invoice are not enough for that, according to the prevailing view. How to follow up calmly and effectively is in the guide to payment reminders.
How to word your payment terms
Write a date instead of a period, so nobody has to count. Examples that address your customers formally, as German business letters do:
- “Please transfer the amount by October 24, 2026 to the account below.”
- “Payable without deduction by November 7, 2026.”
- “Please quote the invoice number with your transfer.”
Cash discount: a reduction for paying quickly
A cash discount (Skonto) is a reduction if your customer pays within a short period, such as 2% for payment within 10 days. You do not have to offer one. It is worth it only if quick money is worth the reduction to you.
What goes on the invoice
A reduction of the price agreed in advance belongs on the invoice under § 14 (4) sentence 1 No. 7 UStG. For a cash discount, a clear note with rate and deadline is enough. It is easiest to understand with the amount:
If you pay by October 24, 2026, you may deduct a 2% cash discount and pay €1,166.20. Without deduction, the amount of €1,190.00 is due by November 7, 2026.
What happens to the VAT
If your customer takes the discount, the price becomes smaller after the fact. Under § 17 (1) UStG you therefore correct your VAT, and your customer corrects their input tax. In the example: €1,000 net plus €190 VAT makes €1,190. A 2% discount is €23.80, of which €3.80 is VAT. Your VAT goes down by €3.80 to €186.20. With several VAT rates you split the discount proportionally.
You do not need a new invoice for this. If your customer deducts a discount after the deadline has passed, that is not a cash discount but an open balance you can claim.
Under the small business rule you charge no VAT. A cash discount is then simply a reduction without any correction.
This guide explains the rules in general and is not legal or tax advice.
Common questions
Do payment terms have to be on the invoice?
No, payment terms are not among the invoice requirements under § 14 (4) UStG. Without them the invoice is due immediately. A clear date still helps your customer pay on time.
Do payment terms run from the invoice date or from receipt?
That depends on your agreement. “Within 14 days” leaves open when counting starts. A fixed date on the invoice settles the question, and for default under § 286 (3) BGB the receipt of the invoice counts anyway.
Does a cash discount apply if my customer pays in installments?
That depends on your agreement. Usually a cash discount applies only if the full amount arrives within the period. If in doubt, say so, for example “cash discount only for full payment by …”.