Chasing unpaid invoices in Odoo: late payment interest under Luxembourg law

In short. Between businesses in Luxembourg, you can claim late payment interest from the day after the due date, without sending a reminder or a formal notice. The statutory rate is the ECB refinancing rate plus 8 points (10.15% for the second half of 2025, the latest rate published in the Mémorial B). On top of that comes a flat €40 recovery fee per invoice, due without any step on your part. Odoo automates the rhythm of your reminders, but it does not compute that interest on its own. Both halves of the subject are covered here.

Most Luxembourg SMEs chase late and chase softly, often because they believe they must "send a formal notice first". In commercial transactions, that is simply wrong. The amended law of 18 April 2004 on payment terms and late payment interest is far more favourable to the creditor than common practice suggests. It still has to be applied, and tooled.

When is an invoice late in Luxembourg?

Between businesses, lateness starts the day after the payment date set in the contract. If no term was agreed, it starts 30 days after the invoice is received (or after delivery, if the invoice date is uncertain). The agreed payment term must not exceed 60 days, unless expressly stipulated and not grossly unfair to the creditor.

Three regimes coexist, and confusing them is expensive:

The consumer regime carries two conditions that are routinely forgotten: the invoice must be issued within the month of delivery or performance, and it must expressly state that statutory late payment interest will be claimed where applicable. An invoice issued too late, or silent on this point, closes the door on interest. That is an invoice template to fix, not a collection problem.

What late payment interest rate applies?

For commercial transactions, the statutory rate is the European Central Bank reference rate plus 8 percentage points, republished every half-year in the Mémorial B. The latest rate published to date (July 2026) is the one for the second half of 2025: 10.15% (2.15 + 8), according to Guichet.lu. Check the rate for the current half-year before issuing a debit note: it changes twice a year.

For transactions with a consumer, the rate is set annually by Grand-Ducal regulation: 3.75% for 2026 (against 4.25% in 2025). Unlike B2B, no other rate can be agreed by contract.

The calculation is the same in both cases:

(Amount due incl. VAT × rate × days late) / (365 × 100)

A B2B invoice of €12,000 paid 45 days late, at 10.15%, therefore produces €150.25 of interest, plus the €40 flat fee. For an SME carrying ten late payments of that size a year, that is €1,900 almost never claimed.

The €40 fee: the right SMEs ignore most

As soon as late payment interest is due in a commercial transaction, the creditor may demand a flat sum of €40 for recovery costs, with no reminder required. Where actual costs exceed that amount (lawyer, collection agency), reasonable additional compensation remains claimable.

This flat fee is not a negotiable penalty: any contractual clause excluding the payment of late interest or compensation for recovery costs is deemed unfair. In other words, a customer who imposes general terms removing that right has not actually removed it.

How do you configure customer follow-ups in Odoo?

Odoo drives collections through follow-up levels, configured in Accounting. Each level triggers a given number of days after the due date of the oldest invoice, and carries its own message and its own channel: email, letter, or a phone call to schedule.

A pattern that works for a Luxembourg SME, built on local law rather than arbitrary delays:

• D+3: neutral email reminder. At this stage it is usually an oversight, not a dispute. Keep the tone factual, with the online payment link.
• D+15: firm reminder, restating the missed due date and announcing that statutory late interest and the €40 fee will apply.
• D+30: phone call scheduled from Odoo, then registered letter. You move from reminder to negotiating a payment plan.
• D+60: debit note for interest plus €40, and a decision on legal action.

The aged receivables report gives the overall picture (what is due at 30, 60, 90 days and beyond) and feeds your financial dashboard. Reminders sent, payment promises and call notes stay attached to the customer: whoever picks up the file sees the full history, which no shared spreadsheet guarantees.

Two upstream settings matter more than the cadence itself. First, correct payment terms on the customer record: an invoice whose due date is miscalculated will never trigger at the right moment. Second, bank synchronisation and regular reconciliation: chasing a customer who has already paid is the fastest way to lose credibility, and it happens as soon as bank reconciliation runs a week behind.

What Odoo does not do on its own

Let us be precise, because this is where most articles stop: Odoo does not automatically apply the Luxembourg statutory rate or the €40 fee to your overdue invoices. The follow-up module handles the cadence, the messages and the audit trail. Computing statutory interest depends on a rate that changes every six months and on the customer's regime (business, public authority, consumer): there is no native button for that.

In practice, here is how it is done: a "Late payment interest" product and a "Flat recovery fee" product are created in the catalogue, VAT-exempt, and a debit note is issued at the D+60 follow-up level. The interest is computed with the statutory formula, using the rate for the relevant half-year. Where the volume of unpaid invoices justifies it, this step can be automated with a custom rule, but for most SMEs one debit note per quarter is more than enough.

You also have to pick your battles. Claiming €40 and €12 of interest from a good customer who paid three days late damages a relationship for nothing. The rule we apply with our clients: automatic cadence for everyone, interest and flat fee reserved for structural lateness and for customers who treat payment terms as free credit.

Illustrative case (given as an example, it does not correspond to a real client). A nine-person services company shows an average payment delay of 68 days. No reminder is automated: the manager handles it "when she has time", which means never before the 20th of the month. What was put in place: 30-day payment terms, four follow-up levels, weekly bank reconciliation. Three months later, the average delay falls below 45 days. The effect does not come from interest claimed, which is almost never invoiced in practice, but from the simple fact that the first email now goes out at D+3 instead of D+40.

Should you go to court?

For small claims, the payment order procedure before the Justice of the Peace covers claims up to €15,000 (see the Guichet.lu page on debt recovery). It is fast and does not require a lawyer, but it assumes a claim that is certain, liquid and due, with the supporting documents: purchase order, invoice, proof of delivery, dated reminders.

That is the real argument for a tool. The day you decide to act, the file assembles itself in a few clicks because the entire history is already there. This information remains general and does not replace legal advice tailored to your situation.

FAQ

Do you need to send a formal notice before claiming late payment interest?

No, not in commercial transactions. Guichet.lu is explicit: the creditor has no step to take, no reminder and no formal notice, and may immediately claim late payment interest once the due date has passed. A formal notice remains useful as a negotiating step, not as a legal condition.

What is the late payment interest rate between businesses in Luxembourg?

The ECB refinancing rate plus 8 points, republished every half-year in the Mémorial B. The latest published rate is the one for the second half of 2025, namely 10.15%. Businesses may contractually agree a different rate.

Does Odoo calculate Luxembourg late payment interest automatically?

No. Odoo automates the cadence of reminders, the messages and the tracking, but not the calculation of the Luxembourg statutory rate. That is handled with a debit note using dedicated products, or with a custom rule if your volume of unpaid invoices justifies it.

Does the €40 fee apply per invoice or per customer?

Per unpaid invoice: it compensates the recovery costs incurred for each claim that fell due without payment, and it is owed without any prior reminder.

Can a public sector customer be chased the same way?

The cadence can be identical, but the legal payment term is shorter (30 days, 60 at most if objectively justified) and the invoice receipt date cannot be negotiated by contract. E-invoicing via Peppol is precisely what timestamps that receipt.

Why Advena?

• Finance and digital under one roof: the Odoo setup is done by people who know the law of 18 April 2004, not just the module.
• Luxembourg grounding: statutory rates, B2B and consumer regimes, local recovery procedures.
• Clear fixed packages, no hourly billing: scope and price are set before we start.
• Direct access to the founders: the partners handle your file.

Going further: Financial dashboards in Odoo · Fractional CFO in Luxembourg · Odoo bank synchronisation in Luxembourg · E-invoicing in Luxembourg · Odoo in Luxembourg: is it the right ERP for your SME?