How can you pay your suppliers after 30 days?

What is 30-day payment?

30-day payment is a common method of payment in commercial transactions It stipulates invoices must be paid within 30 days of receipt. This practice offers companies flexibility in their cash flow, while maintaining balanced business relationships.

In other words, this practice consists in obtaining the best possible service from suppliers, 30 days to pay their invoices. This period starts from :

• Invoice issue date ;

• OR receipt of goods ;

• OR performance of the service.

Payment within 30 days can have advantages, such as limiting cash flow fluctuations.

What is the legal deadline for paying an invoice?

The legal deadline is set by contractual agreements or by law.

General case

In principle, the payment deadline is 30 ^e day following receipt of the goods or performance of the service. However, this period may be extended beyond 30 days, without exceeding 60 days from invoicing, if specified in the contract and if it does not constitute a manifest abuse to the creditor's detriment.

For recurring invoices, the maximum payment term is 45 days end of the month. There are two ways of calculating this period:

• Add 45 days after the end of the month in which the invoice is issued;

• Add 45 days to the invoice issue date, then go to the end of the current month.

The calculation method used must have been agreed in advance and specified in the contract.

In the absence of a time limit agreed between the parties, a suppletive deadline applies, for a period of thirty days from receipt of the goods or performance of the requested service.

Specific cases

There are specific cases where the legal deadline for paying an invoice may differ from the general case.

Negotiated payment terms

Professionals can agree a payment term, within 60 days of invoice date . If the payment term is stated on the invoice, it can be extended to 45 days from the end of the month following invoice issue.

Cash payment

The professional pays the invoice in full as soon as the goods or services are received. Setting a payment deadline in the legal or contractual payment does not prohibit cash payment or advance payment. It is only a maximum period.

Payment by default

The professional pays the bill within 30 days after receipt of goods or performance of services. Prescribed by the French Commercial Code, this payment period applies to if the contract does not specify a payment period. This is the default payment term.

Payment on delivery

The professional pays the invoice within one week of delivery of the goods or performance of the services, including time to receive invoice.

Sector-specific lead times

There are also business sectors where the legal deadline for paying an invoice may differ from the general case.

In the agri-food sector

Payment terms vary depending on the product:

• Fresh meats: 20 days from delivery ;

• Grapes and musts for alcohol and wine production: 45 days from the end of the month of delivery or 60 days from delivery ;

• Alcohols subject to consumption rights: 30 days from the end of the month of delivery. For example: if a delivery was made on the 7th of the month, the 30-day payment period will begin on the 30th of the month.

In the building and civil engineering sector

The legal deadline for paying an invoice is 45 days from the date of completion of the work or provisional or final acceptance of the work.

In the seasonal sector

The deadline varies depending on the case:

• Toy trade : January to September: 95 days from billing and October to December: 75 days from billing.

• Watches, jewelry 59 days from month-end or 74 days net from invoice date.

• Leather industry : 54 days from the end of the billing month.

• Agricultural equipment For green space maintenance equipment, 55 days from the end of the month of invoicing. For agricultural equipment, 110 days from invoice date.

What are the consequences of paying late?

Late payment is a situation that can have a negative impact on both the creditor and the debtor. This is why sanctions are provided for by law and sometimes by contract.

Late payment penalties

The creditor can claim late penalties to debtors who fail to meet the payment deadline agreed or set by law. These penalties are calculated on the basis of the legal or contractual interest rate. Penalty amounts shall not be less than a fixed indemnity of 40 euros for collection costs.

Collection costs

Creditors may incur collection costs to obtain payment of their debt. These include expenses relating to amicable or legal proceedings to recover sums due. These costs can include dunning fees, the fees of a lawyer, bailiff or collection company, procedural costs, etc.

These collection costs are charged in addition to the principal due and any late payment penalties.

Administrative fine

An individual risks a penalty ranging from €75,000 to €150,000 for failure to meet payment deadlines. For legal entities, fines can range from €2 million to €4 million in the event of repeated misconduct.

What are collection fees?

First of all, it's important to know that collection fees are additional fees that a creditor may charge a debtor for late payment or non-payment of a debt . These fees are intended to offset the costs incurred by the creditor in recovering the amount due. They may include :

• Administrative costs ;

• Dunning charges ;

• Legal fees;

• Etc.

Since a decree was issued in 2012, the amount of compensation for collection costs has been set at 40 euros . The creditor may to claim from the debtor in the event of late payment of an invoice. These indemnities apply to commercial transactions between professionals, and must be mentioned in the general sales conditions and on the invoice.

If the collection costs exceed 40 euros, the creditor may request additional compensation, provided it can be justified.

At what stage does the 30-day payment period begin?

In principle, the 30-day payment period runs from performance of the service or delivery of the goods. In commercial practice, however, the ten-day rule is generally applied.

A decade represents a 10-day period. In practice, we therefore observe a 10-day delay before the 30-day payment period begins.

For example, if the invoice is issued on the 2nd of the month, the 30-day period begins on the 10th. If the invoice is issued on the 24th, the period begins on the 30th.

How can I legally pay beyond 60 days?

The legal 30-day payment deadline was set to give companies a degree of flexibility in their cash flow. But what would you say if you could have more time? Beyond 60 days?

This is one of the advantages of using our payment solution Hero . Hero est the B2B payment solution for transactions between VSEs and SMEs . To meet the specific needs of this type of company, the platform offers deferred payment and payment in instalments .

By offering deferred payment, Hero allows you to pay your suppliers beyond the legal payment deadlines.

How is this possible? Hero advances payment of your invoices to your suppliers and collects cash In addition, you may discount the invoice for immediate payment. Then, on your side, you have a further period in which to reimburse Hero for the amount it has advanced less any discounts.

Opting for a 30-day payment term offers considerable flexibility in financial management. However, it is essential to strike a balance between the benefits of this timeframe and the need to pay suppliers. The 30-day payment remains an effective tool, but requires judicious management.

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