Reminders and debt collection
If your customers do not pay up, you will soon start losing money. The longer it is since the due date, the more difficult it can be to collect the money. Customers who have difficulty paying their bills will often wait before paying. It is therefore important to follow-up trade debtors continually.
Send a reminder or debt collection notice as soon as possible after the due date. Some businesses also outsource their debt collection (e.g. to a debt collection company).
If you want to charge a reminder fee, you must wait at least 14 days after the original due date before sending a reminder or debt collection notice. You can charge no more than two reminder fees - either for two reminders or for one reminder and a debt collection notice. If you send a payment demand yourself, you can also charge a maximum fee of no more than NOK 210 for this. Value added tax must not be added to these fees.
When a customer fails to pay up, you can start adding interest to your claim from the day after the due date if you have specified a due date on the invoice. If no due date is agreed, you will not be able to start adding penalty interest to your claim until 30 days after the invoice date.
Twice a year, the Ministry of Finance sets a maximum rate for penalty interest.
Penalty interest between businesses
When the customer is a business, you can agree a higher rate for penalty interest than is stipulated by the Ministry of Finance. This must then be stated either on the invoice you send the customer or in a separate agreement. If you have not agreed a specific penalty interest rate, you will not be able to charge any more than the rate stipulated by the Ministry of Finance.
Penalty interest for consumers
With regard to consumers (private individuals), you are not permitted to charge more than the penalty rate stipulated by the Ministry of Finance.
If the customer is a business or public authority, you can charge standard compensation for your debt collection expenses in addition to penalty interest. This compensation cannot exceed NOK 390. Standard compensation can be charged on the day after the due date on the invoice and is charged instead of any reminder fee.
After the due date, it is up to you to decide how long you want to wait before issuing a payment reminder and the number of times you want to issue a reminder before you issue a debt collection notice. You can send out a reminder on the day after the due date if you wish. You can also send a debt collection notice on the day after the due date without any prior reminder.
The following requirements must be met if you wish to charge a reminder fee:
- At least 14 days must have passed since the due date.
- The reminder must be issued in writing. Electronic communication may be used if the notification is sent in a "satisfactory manner".
- There must be a payment deadline of 14 days.
- There must be a statement of what the claim concerns. However, it is sufficient to refer to the invoice number.
- The amount
Debt collection notices
Before you to refer a case for debt collection, you must always send a debt collection notice. In principle, you can send a debt collection notice to the customer on the day after the due date. However, you should remember that you cannot charge a fee until 14 days have elapsed since the due date. It is important to follow the formal requirements for the validity of a debt collection notice.
- Debt collection notices must be sent in writing. Electronic communication may be used if the notification is sent in a "satisfactory manner".
- Debt collection notices must be clearly marked with "Inkassovarsel" (Debt collection notice) or "Varsel om inkasso" (Notification of debt collection).
- They can be sent on the day after the due date stated on the original invoice if you do not wish to charge a reminder fee.
- If you do not intend to charge a reminder fee, you must wait until 14 days after the due date before sending the notice.
- The payment deadline must be 14 days.
- It must be clearly stated that the case will be referred for debt collection or transferred to a debt collection agency for recovery if the amount is not paid.
If the customer does not agree with the claim, you can generally not refer the case for debt collection. In such cases, you must obtain a decision concerning the claim, e.g. from the Conciliation Board. This applies unless the arguments are obviously unfounded. It is you who must decide whether this is the case.
Referring the case for debt collection (external debt collection)
If you use a debt collection company, you can transfer the case to them for recovery of the debt if the claim remains unpaid. At what stage in the process you should refer the receivable to the debt collection company is up to you to agree. Many enterprises transfer all overdue receivables for collection by the debt collection company and let them do the entire job. Others opt to send reminders themselves first and then let the debt collection agency send the debt collection notice and the payment demand. In such cases, the debt collection company will normally retain the fees that are charged. On the other hand, you avoid having to spend time on the case.
Inhouse debt collection
If you decide to do all your debt collection yourself, this is known as 'inhouse debt collection'. Some enterprises opt for a 'pleasant' version and send several friendly reminders before sending a debt collection notice. Others send the debt collection notice on the day after the due date. How you do this is up to you to decide.
Once the receivable has been referred for debt collection, a payment demand will be sent. Payment demands cannot be sent any earlier than 14 days after the debt collection notice is sent and must stipulate a deadline for payment of at least 14 days. In the case of inhouse debt collection, as of 1 January 2019, you are not permitted to charge more than NOK 210 in fees for the payment demand.
Legal debt collection/Enforcement in connection with inhouse debt collection
If the debt collection notice and payment demand do not achieve the desired effect, the final step in the process is to recover the amount with the assistance of the enforcement officer.
Eksempelfirma AS has decided to recover the debt itself. They have decided to send one reminder before sending the debt collection notice. The procedure will then be as follows:
- A reminder with a fee of NOK 70 is sent 14 days after the original due date stated on the invoice, with a payment deadline of 14 days.
- A debt collection notice with a fee of NOK 70 is sent 14 days after the reminder, with a payment deadline of 14 days.
- A payment demand with a fee of NOK 210 is sent 14 days after the debt collection notice, with a payment deadline of 14 days.
- An application for direct distraint is sent to the enforcement officer for execution, i.e. legal collection of the claim with the assistance of the authorities (the enforcement officer).