International debt collection in France
International Collection in France: New rules for invoicing
Since 1st October 2019, two additional legal requirements need to appear on invoices:
- the billing address (if it is different from the delivery address)
- the purchase order number (if one was issued by the buyer)
The penalties for breaching these new rules have been reinforced with the introduction of a administrative fine. These new provisions are the result of a Law dated 24th April 2019 revision IV of book IV of the French Commercial Code relating to transparency, restrictive practices of competition and other prohibited practices.
57% of companies consider that these will reduce litigation and contribute to reduce late payment in commercial transactions; 32% believe that these will increase the time taken to issue the invoice. We expect that monitoring will take place to assess if this is beneficial to both suppliers and clients. In theory, it should be, and if nothing else, it should be a wake up call to all that no sale should take place without a purchase order. At the back end, it makes the job or collection agencies a lot easier when there is no argument about the basics. Obviously, this could be an issue for SMEs in terms or adapting their IT tools to these new requirements. If you export to France, your invoices should take these new rules into account, and this is a good opportunity to ensure that all other areas of your invoice template are in line with regulatory requirements in France.
Remember that there are over 20 legal requirements for companies to strictly follow when raising an invoice, and the penalty for non-compliance with any of these invoicing rules was modified as follows:
the new administrative fine replaces the previous criminal fine. The fine now can be up to 75,000 euros for a trader and 375,000 euros for a registered company, with a doubling of these sums in the event of reoffending within two years. This should be a good motivator to review your invoice template.
This new regulation should reduce processing times and therefore payment times. On the other hand, as we all know, obtaining a valid purchase order number can sometimes take time, especially from large companies, where each department operates on strict budgets.
In any case, this is good practice: the more precise the invoice, the better the chances of getting it paid on time. It’s just a shame such practice has to come via a Law when this should just be common sense…
For more information on international debt recovery and International Letter Before Action, get in touch with our team of international debt collectors and debt collection managers. Credit Limits International is a leading international debt recovery agency in Kent member of the TCM Group.