Payment by Invoice
Shopping on bill is one of the most frequently used payment methods. The payment by invoice has been used for decades. In particular, the large mail order companies were and are unthinkable without this option. Today, mainly online stores and service providers use the payment by invoice, but also in retail this payment option can be quite useful.
Regular procedure
The details of a payment by invoice can vary in stores or with retailers, but in the essential criteria they follow uniform regulations that arise from the law of obligations, commercial law and VAT law.
In the case of payment by invoice, the customer can order goods and articles and receive them immediately, or within two or three working days. Together with the goods, the buyer receives an invoice. Alternatively, the invoice can be sent by mail or electronically by e-mail. The invoice documents the claim of the merchant or store and contains all the details of the purchase and the so-called terms of payment. For a value of goods up to 150,- Euro (gross) these are:
- the issuer
- the date
- the purchased or ordered quantity of goods
- the tax rate (full or reduced)
- the payment term (period or date until the invoice is paid).
If the value of the purchased goods exceeds 150,- Euro, the following will be added to the invoice
- the recipient
- the tax number
- the invoice number
- the date of delivery or purchase
- the net value of the goods
- the proportional sales tax to be added.
As a rule, the buyer has 14 days to transfer the stated invoice amount to the merchant. However, a payment term of only seven days or even 30 days is also possible. With the settlement of the invoice amount, the goods become the complete and final property of the buyer. This concludes the payment by invoice for both parties.
Irregularities
A significant factor in the payment by invoice are incomplete or late payments by the customer. Although almost all stores and merchants carry out a credit check (Schufa) before the purchase, payment defaults cannot always be avoided despite such precautions. For small retailers, such irregularities can quickly threaten their existence. This is where the customer is called upon. In the event of sudden payment difficulties, he should contact the merchant immediately to arrange a payment extension or installment payment. If he fails to do so, the merchant will initiate the dunning procedure, which consists of payment reminders, dunning letters or even a collection procedure.
Advantages for the buyer
Thus, despite a credit check, payment by invoice always involves some risks for the seller. The buyer, on the other hand, enjoys some significant advantages.
The goods can first be thoroughly checked for damage or completeness after receipt. In the event of complaints, the buyer is in a much better position. In addition, the ordered goods can be used before they become the property of the buyer. In the case of larger purchase sums and a payment term of up to one month, economic issues may well be affected because interest is paid on the purchase sum in the buyer’s account for a further 30 days. And finally, when purchasing on account (especially online), no sensitive data or details (account or credit card number, passwords, PIN, etc.) are requested.
