Every business owner has lived through it. The work is done, the invoice went out, the due date passed — and nothing arrived. Clients who do not pay are part of the job. What matters is reacting in an orderly way: systematically, professionally and on legal ground you can stand on.
This article walks through the whole escalation, from the first reminder to enforcement through the courts. It also shows how statutory late-payment interest is calculated, what the law gives you, and how to keep the situation from arising.
Why clients do not pay
Before the remedies, the causes. Bad faith is not always the explanation:
- They forgot — surprisingly common, especially on smaller invoices. The email simply got buried.
- They have cash-flow trouble of their own — the client is waiting on their own customer, and the delay travels down the chain.
- They dispute the amount — they have a reservation about the scope or the quality of the work and have not said so.
- Process delay — larger companies run approval and accounts-payable cycles that simply take longer.
- Deliberate non-payment — the worst case. The client will not pay, or cannot.
The remedy follows the cause. A forgetful client needs a friendly nudge; a deliberate non-payer has to be dealt with legally.
The escalation: from a nudge to the courtroom
Work through the stages in order. Each one is firmer than the last, and together they build the record you will need if the claim ends up in court.
Stage 1: a friendly nudge (1–7 days past due)
Send a polite message as soon as the due date passes. Keep the tone light — you are assuming an oversight.
Sample email:
Hello [name],
A quick note that invoice no. [number] for [amount] CZK fell due on [date] and my records show it as unpaid. If you have already sent the payment, please disregard this message.
I am happy to resend the invoice or supply the payment details again. There is also a QR code on the invoice if that is quicker for you.
Thank you, and have a good day.
In Taxorio you can spot overdue invoices on the dashboard instead of checking due dates by hand — the overdue ones are marked as such.
You can also take this first stage off your plate entirely. On the PRO plan you can switch on automatic reminders and Taxorio writes to the client on a schedule you set. The default cascade starts with a polite note three days before the due date, then a reminder three days after it and a last one after two weeks — and it is the pre-due note that heads off most delays, because the invoice resurfaces in the client's inbox while there is still time. Reminders go out only on working days between 8:00 and 18:00 Prague time, and you can switch them off or postpone them to a date for a particular client or invoice. The history of everything sent stays attached to the invoice, so if the claim does escalate you can show when you wrote and what you said.
Stage 2: the first formal reminder (7–14 days past due)
If the friendly note produced nothing, move to a formal reminder. Still professional in tone, but firmer.
A formal reminder should contain:
- The invoice number and issue date
- The amount outstanding
- The original due date
- The number of days overdue
- The payment details (account number, variable symbol)
- A new deadline for payment, usually 7 days from delivery
- Notice that late-payment interest may be charged
Stage 3: a second reminder, with interest quantified (14–30 days past due)
If the first formal reminder goes unanswered, send a second one that states the late-payment interest in figures.
Stage 4: the pre-action demand (30–45 days past due)
The pre-action demand (předžalobní výzva) is the last step before proceedings. It is a formal letter, ideally sent by registered post with proof of delivery, containing:
- An explicit heading: "Předžalobní výzva" (pre-action demand)
- Precise identification of the claim: invoice number, amount, due date
- The total owed, including late-payment interest, set out in figures
- A final deadline for payment, usually 7–14 days
- Notice that the claim will otherwise be pursued through the courts
- Notice that the client would then bear the costs of the proceedings
Why the pre-action demand matters: under Section 142a of the Code of Civil Procedure (Act No. 99/1963 Coll.), sending it is a condition of being awarded your costs. If it does not go out at least 7 days before the claim is filed, the court need not award you costs even if you win. Always send it by registered post with proof of delivery.
Stage 5: enforcement (45+ days past due)
If the demand produced nothing, you have several routes:
Order for payment (platební rozkaz):
The fastest route for an undisputed claim. You apply to the district court for an order for payment, which the court may issue without a hearing. The debtor then has 15 days either to pay or to file an objection. Without an objection, the order becomes final and enforceable.
Electronic order for payment (EPR):
For claims up to 1 000 000 CZK you can use the electronic order for payment through the justice.cz portal. The court fee is lower — 4 % of the amount claimed, at least 400 CZK, against 5 % for the ordinary application — and the process runs electronically.
Arbitration:
If your contract contains an arbitration clause, the claim can be decided in arbitration. It is usually quicker (around 30–60 days) and cheaper, and the award is directly enforceable, like a court judgment.
Late-payment interest: getting the figure right
Late-payment interest is a statutory entitlement, not something you have to bargain for. The basis is Section 1970 of Act No. 89/2012 Coll., the Civil Code: a creditor may demand late-payment interest from a debtor who is in default on a monetary debt.
The statutory rate
The rate is set by Government Regulation No. 351/2013 Coll. and equals the ČNB repo rate in force on the first day of the calendar half-year in which the default began, plus 8 percentage points.
For 2026 you therefore need the ČNB repo rate as at 1 January 2026, or 1 July 2026 for a default that began in the second half. The current rate is published on the ČNB website.
A worked example:
The ČNB repo rate on 1 July 2026 is 3.75 %. Statutory late-payment interest for delays arising in the second half of 2026 is then 3.75 + 8 = 11.75 % a year (for delays arising in the first half of 2026 the repo rate on 1 January 2026, 3.50 %, applies — 11.50 %).
An invoice for 50 000 CZK, 30 days past due:
- Daily interest: 50 000 × 11.75 % / 365 = 16.10 CZK
- Interest over 30 days: 16.10 × 30 = 483 CZK
On larger invoices and longer delays it runs into thousands:
- An invoice of 200 000 CZK, 90 days past due: 200 000 × 11.75 % / 365 × 90 = 5 795 CZK
Note: you do not have to agree late-payment interest in advance — it arises by law. It is enough that the invoice had a due date and the debtor missed it. You may of course agree a contractual rate that is higher, as long as it does not offend good morals.
Flat-rate compensation for collection costs
On top of the interest, a creditor is entitled to a minimum flat-rate compensation for the costs of pursuing the claim of 1 200 CZK under Section 3 of Government Regulation No. 351/2013 Coll. It arises automatically when a debtor in a business-to-business relationship falls into default, and you do not have to prove what the collection actually cost you.
Prevention: keeping the risk down
The best claim is the one you never have to enforce. A few measures that work:
1. Check the client first
Before you take on a new client, look them up:
- ARES — confirm the company exists and is active. In Taxorio you can pull company details straight from the register by IČO (the Czech business ID).
- Insolvency register (ISIR) — check whether insolvency proceedings are running.
- Central register of enforcement proceedings — check for enforcement against them.
- References — ask people in your field what their experience has been.
2. Put the terms in writing
Even on small jobs, have at least a basic written agreement — an exchange of emails will do — covering:
- The scope of work and the deliverables
- The price and payment terms
- The invoice due date
- What happens on default: late-payment interest, the right to suspend work
3. Advances and staged payments
On larger jobs ask for 30–50 % up front before you start. On longer projects set payment milestones. A brand-new client with no history? Asking for the full amount in advance is not rude — it is ordinary commercial sense.
4. Shorter due dates
The shorter the term, the sooner you learn whether the client pays on time. Set 7 days on the first job with someone new; once their payment record is established you can extend it.
5. Make paying easy
Take every obstacle out of the way. Put the payment details clearly on each invoice and add an SPD QR code. In Taxorio QR payments are on by default, and the code appears on issued and overdue invoices whenever the document has a bank account in its currency — the client scans it in their banking app and pays without retyping anything.
6. A system for tracking invoices
Have something that shows you the state of every invoice at a glance. The Taxorio dashboard separates them into:
- Paid — nothing to do
- Unpaid but not yet due — no action needed
- Overdue — needs your attention
A regular look at it, ideally weekly, catches problem invoices while there is still time to act.
What unpaid invoices do to your tax
An unpaid receivable has tax consequences too:
Income tax
A sole trader keeping the simplified tax records (daňová evidence) taxes income when the money actually arrives (Section 5 of the Income Tax Act). If the client never paid, there is no income to tax and no tax problem. Full accounting works the other way: revenue is taxed when the invoice is issued, whatever happens with the payment — and then you can create adjusting entries against the receivable under Act No. 593/1992 Coll., on reserves for determining the tax base.
DPH (VAT)
The duty to declare DPH arises on the date of the taxable supply (DUZP — the date of taxable supply), not on the date of payment. You therefore pay VAT on invoices your client has not paid. Where the claim is irrecoverable — the debtor is in insolvency, in enforcement and so on — Section 46 and following of the VAT Act allow a correction of the tax for receivables from debtors in insolvency proceedings, subject to the conditions there.
In practice: this is exactly why cash-flow planning matters. Assume you will pay the VAT on every invoice you have issued, including the ones nobody has paid yet, and keep a reserve for it.
Writing the receivable off
A demonstrably irrecoverable claim can be written off. A tax-effective write-off is available above all for receivables covered by an adjusting entry under the Reserves Act, and for receivables from debtors in insolvency. For a sole trader on simplified tax records the write-off is simply income never collected — it never appears in the records in the first place.
When to let it go
Not every claim is worth pursuing. Before you start proceedings, weigh up:
- The claim against the cost of proceedings — the court fee is 5 % of the amount claimed (at least 1 000 CZK), plus legal representation if you use it. Below roughly 5 000 CZK, litigation rarely pays for itself.
- Whether the debtor can pay at all — if they are in insolvency or have no assets, a judgment will not conjure money out of nowhere.
- Time and attention — proceedings run for months, and those are months you could spend earning.
- The relationship — do you want to keep working with this client? A compromise is sometimes worth more than a win.
On smaller amounts prevention is usually cheaper than collection. Time spent checking clients, writing careful terms and watching payments systematically saves you the problem claims before they exist.
Summary: an action plan
- The day after the due date — a friendly email reminder
- 7 days past due — the first formal reminder, with a new deadline
- 14 days past due — a second reminder, with the interest quantified
- 30 days past due — a phone call, and an attempt to agree an instalment plan
- 35–40 days past due — the pre-action demand, by registered post with proof of delivery
- 45+ days past due — an application for an order for payment, or a claim
Above all, use tools that make prevention and early reaction easy. Taxorio keeps the state of your invoices visible, puts QR codes on them for faster payment, and gives you a financial dashboard for the wider picture — because the best way to deal with clients who do not pay is to stop them becoming that in the first place.
What due date to give a client, and what the Civil Code says about it: Invoice due dates in 2026.
Taxorio scope: Taxorio provides invoicing and income/expense records for Czech sole traders. It is not full accounting or personalised tax advice. For an unsupported or unusual case, verify the treatment with a Czech accountant or tax adviser before filing.