How to deal with a payment deadline check: A complete guide for SMEs

Understanding business-to-business payment terms

Definition and legal thresholds

The legal deadlines are generally 30 days from receipt of the goods or performance of the service, with the possibility of express agreement to extend this period to 60 days or at 45 days end of month.

Example of a clause to be inserted in your CGV or contracts :
“The payment of invoices issued by the Service Provider may not exceed 60 days from the date of issue, or 45 days at the end of the month, in accordance with article L441-10 of the Commercial Code. Any amount not paid by the due date will result in the application of a penalty and a fixed compensation for recovery costs.”

Risks incurred for SMEs in the event of non-compliance

In addition to the administrative fine, the penalty may include a mandatory publication on the DGCCRF website, entailing a serious reputational risk. Several industrial SMEs and listed companies have already suffered these consequences, with substantial fines.

The competent authority: the DGCCRF and the role of the DREETS

DGCCRF: powers and scope of action

The DGCCRF is the national authority competent to monitor compliance with payment deadlines, in collaboration with the DREETS in the region. It has extensive powers, including access to premises, the collection of accounting documents, and the possibility of on-site auditions. Professional secrecy is not an obstacle to this control.

The stages of checking payment deadlines

• Control often unannounced or upon notification
• Documentary request: invoices, general ledger, auxiliary balances
• On-site or remote control, with contradictory exchanges
• Analysis of a sample of invoices for the financial year ended

Concrete examples of procedures

• An SME had to provide 40 supplier invoices over a year, with proof of payments and correspondence.
• A company justified a delay by a commercial dispute accepted during the adversarial phase.

How does the DGCCRF check the payment terms of companies?

Methodology and requested documents

The DGCCRF analyzes:

• invoices issued and received
• auxiliary customer and supplier scales
• The general ledger
• bank receipts of payment

To remember:
Delays related to proven disputes or legitimate assets are exempting reasons if you provide reliable written proof (mail, email, lawyer's letter).

Jurisprudential examples

• Company sanctioned despite good faith because it did not provide any evidence of disputes.
• An SME partially exempt thanks to the presentation of a major commercial dispute on several invoices.

Penalties for non-compliance with payment deadlines

Amount and calculation of the DGCCRF fine

• Fines up to 2 million euros for a legal entity, and up to 4 million in case of recidivism.
• Calculation based on the total amount of delays, number of invoices impacted, and financial situation.
• The fine may be staggered after reasoned request.

Administrative and criminal sanctions

• Public sanction, sometimes with the obligation to publish the decision.
• Criminal sanctions in the event of obstruction: up to 2 years in prison and a fine of €300,000.

Examples of decisions

• SMEs fined €400,000 with the obligation to publish on its website.
• Start-up benefiting from an spread of the payment of the penalty thanks to the intervention of a lawyer.

Conduct of the adversarial procedure and the rights of the audited company

Contradictory phase: 60 days to respond

You have 60 days to respond after notification of the draft sanction. It is crucial to organize a complete supporting file:

• Proof of reminders
• written letters
• evidence of proven disputes
• proof of assets

Best practices for limiting risks

• Digitize the management of invoices and payments
• Formalize exchanges with suppliers
• Prepare the answer with the help of a specialized lawyer

Exemption reasons accepted

• Justified disputes with solid written evidence
• Invoices cancelled by valid credit note
• Exemption of non-performance with serious reasons

FAQ — Control of payment terms by the DGCCRF: all your questions

What is the penalty for non-compliance with payment deadlines?

Administrative fine of up to 2 million euros, with the risk of judicial publication.

What is the competent authority to control payment deadlines?

The DGCCRF at the national level, supported by the DREETS at the regional level.

What are the sanctions powers of the DGCCRF?

Access to documents, unannounced visits, hearings, fines, and publication measures.

How does the DGCCRF check the payment terms of companies?

Documentary analysis, verification of accounting entries, control of proof of payments.

How to calculate the DGCCRF fine?

Depending on the severity, the recurrence, the amount of delays, and the financial situation.

What are the possible remedies?

Free appeal to the DREETS, hierarchical appeal (ministry), litigation before the administrative court.

Best practices and proactive advice for SMEs

Prevent a check on payment terms

• Conduct a regular internal audit of your processes.
• Review and update of contractual clauses.
• Training of financial and legal teams.
• Ask a lawyer to anticipate and secure.

Example of a specific clause to include in your contracts

Invoices will be paid within a maximum of sixty (60) days from the date of issue, in accordance with current regulations. Any sum not paid within the deadline will be increased by late payment interest at the legal rate and a fixed compensation of 40 euros for recovery costs.

Mission of a lawyer during a DGCCRF audit

• Due diligence and document structuring
• Preparing the defence in the adversarial phase
• Negotiating the penalty and supporting appeals
• Awareness-raising and training of internal teams

Importance of professional support and the role of the lawyer

This subject is highly regulated. The support of a lawyer is essential for:

• Anticipate controls and structure defense
• Building a solid and legally founded argument
• Support during the appeal phase
• Training teams in prevention

To go further: DGCCRF FAQ and official guidelines

Consult the official FAQ and updated DGCCRF guidelines regularly for maximum compliance.

Article written by Guillaume Leclerc, lawyer in commercial contracts and commercial litigation in Paris

Victoris Avocat law firm intervenes very regularly to defend the interests of its clients within the framework of administrative controls (DREETS, DGCCRF) and has expertise in these procedures.

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