Can an invoice become time-barred after only six months?
And if you have drawn up the invoice, it means that you cannot enforce payment after that period. The bottom line is to make sure you know the legal limitation period for your invoices. That way you can collect them before it is too late.
The difference between a time barred invoice and an expired invoice.
You should not confuse a time barred invoice with an expired invoice.
An expired invoice is an invoice that has not been paid on the due date. This is the date on which the agreed payment term ends. If you have come to a specific agreement on this with your customer, the due date is 30 days after the invoice date.
With a time barred invoice, you are no longer legally entitled to its payment. This is because the customer's obligation to pay is extinguished by the statute of limitations. It is, therefore, too late to recover the expired invoice.
The limitation period for b2b invoices is usually ten years
In most cases, a business-to-business invoice expires after ten years, but there are important exceptions. What you invoice determines the exact limitation period of your invoice.
Some significant examples:
-
Limitation after six months
Almost everything that has to do with education falls under this category. So, if you give company training courses, the invoices you send will be time-barred after only six months.
Restaurant, catering, and hotel activities (HoReCa) also have a limitation period of six months. If a company comes to eat or celebrate in your establishment, make sure they pay within six months.
In many cases, transport activities also have a limitation period of six months.
-
Limitation period after one year
This is not very common. The most important invoices that are time-barred after one year are those referring to commercial mediation and bailiff fees.
Expiry after two years
In this category, you will find medical activities (doctors, dentists, hospitals, nursing homes, etc.).
-
Expiry after three years
All invoices relating to insurance are subject to a limitation period of three years.
-
Expiry after five years
Invoices for the production and distribution of electricity have a limitation period of five years. Telecommunications are also in this category.
An unpaid invoice for rent also lapses after five years.
Lawyers and legal advisors must also ensure that they are paid within five years.
Please note! We have listed here the most common exceptions to the standard limitation period of ten years, but this overview is far from complete.
How can you tell if your invoice is past due?
If you submit an expired invoice to Unpaid, we will automatically check if the invoice is out of date or not. Legally, you can only apply the IOS procedure to non-due invoices.
Can you avoid prescription?
Certainly! In one of the following ways:
- Suspend the limitation period
This means that the period ceases to run. Once the suspension disappears, the limitation period simply continues where it was 'paused'. How do you obtain a suspension? Initiating collection proceedings for the invoice is one way. With Unpaid, the bailiff will send it to your client within five working days after the submission of your claim. At that moment, the suspension will take effect.
- Interrupt the limitation period
When you interrupt the limitation period of an invoice, it starts all over again. You can read how to do this in this article.
Do you want to know whether your invoice is statute-barred or not?
With the Limitation Calculator, you can effortlessly find out when your invoices are time-barred. Try it and avoid unpaid invoices!
Is an overdue invoice threatening to expire?
Take action now and get the money you are entitled to.