Undue payment to a supplier: your rights and the five-year limitation period

If your organisation pays an invoice twice, pays more than contractually agreed or pays a party that had nothing to claim, that is an undue payment. The law gives you the right to reclaim that money. In practice, however, that only happens if you actually discover the payment, and that is usually where it goes wrong.

What does the law say?

Dutch law gives undue payment its own legal basis: anyone who has paid without legal grounds can reclaim the amount as unduly paid. The limitation period is in principle five years, starting from the moment you are aware of both the claim and the recipient. Please note: this article is general information and not legal advice; always have the exact periods and legal grounds in a specific case checked by a lawyer.

Why the period is tight in practice

The limitation period sounds generous, but in practice it works against you. An undiscovered duplicate payment from 2021 may no longer be recoverable in 2026. Every month without active review of the payment history lets potential claims evaporate. This is the main reason recovery audits routinely cover the full recoverable period of five years, and why postponing such a review literally costs money.

How to approach recovery

• Support the claim fully: invoice copies, proof of payment, bank statements and a clear calculation.
• Approach the supplier in a businesslike, factual way. The vast majority of suppliers verify the claim and simply cooperate; it is about correcting an error, not a dispute.
• Offer offsetting against open invoices as a practical alternative to repayment.
• Record every claim and how it was settled, also for your own process improvement.
• If a supplier does not respond, interrupt the limitation period in time with a written demand and seek legal help if necessary.

Prevention as well as cure

Structural recovery starts with structural detection. Organisations that have their payment history reviewed periodically almost always combine this with improvements at the source: cleaned-up vendor master data, tighter controls on invoice registration and a four-eyes principle on bank account changes. That way the number of new claims falls while the old ones are recovered.