Invoicing and dunning in Switzerland: deadlines, default interest and reminder fees

An invoice only becomes revenue once the money is in your account. For a sole proprietorship or a self-employed person, unpaid invoices are therefore not a bookkeeping detail but a liquidity question: if you pay your own rent, social insurance and suppliers on time, you cannot wait months for payments to come in.

This article sums up the rules that apply in Switzerland – from payment terms to debt enforcement. It is not legal advice, but it gives you the basics to set up your dunning process properly.

What belongs on an invoice

For an invoice to be enforceable, it has to be clear who owes what to whom and for how much. In practice that means:

• Your name and address as well as your customer’s
• The invoice date and a sequential invoice number
• A description of the service with quantity, price and delivery date
• The total amount and, if you are VAT registered, the VAT rate and your VAT number
• A concrete due date
• Payment details – in Switzerland usually the QR payment slip with QR-IBAN

If you are VAT registered, it is worth looking at the details of VAT accounting: incorrectly stated VAT leads to corrections later on.

Payment terms: 30 days is convention, not law

A persistent misconception: there is no statutory 30-day payment term in Switzerland. Under Art. 75 CO, performance can be demanded immediately if neither the contract nor the nature of the transaction provides otherwise. “30 days net” is therefore pure convention – widespread, but not prescribed.

That has a practical consequence: the term written on your invoice is the term that applies. Set it deliberately. With new customers or for larger amounts, 10 or 14 days are just as admissible as 30.

When is your customer in default?

Default is the moment from which you gain additional rights. Under Art. 102 CO there are two routes to it:

• With a specific due date: if the invoice carries a definite date (“payable by 30.09.2026”), default occurs automatically the following day, without any reminder at all.
• Without a specific date: if there is no such date, you first need to send a reminder. Only then does default begin.

That is the strongest argument for always setting a due date rather than just “payable within 30 days”. In a dispute, it saves you an entire step.

Default interest: 5 per cent per year

Once default has occurred, Art. 104 para. 1 CO entitles you to default interest of 5 per cent per year – without this having to be agreed anywhere. A higher rate can only be claimed if you established it contractually in advance.

A worked example: on an outstanding invoice of CHF 5’000 that is 60 days overdue, that comes to roughly CHF 41 in interest. On small amounts this is more a signal than a source of income – but on larger invoices or long delays it adds up noticeably.

Reminder fees: only with a contractual basis

This is where many get it wrong. Unlike default interest, reminder fees are not owed by operation of law. They require a contractual basis – and according to case law, a vague clause is not enough. A sentence such as “reminder charges are borne by the customer” is insufficient: the amount has to be named explicitly.

In practice: put a concrete amount in your terms and conditions or in your quote, for example “CHF 20 per reminder”. Without that basis you can list a fee, but you will not be able to enforce it if it comes to a dispute. Usual amounts range between CHF 20 and CHF 30 – charging considerably more risks the fee being deemed inadmissible.

The dunning process in three levels

A staged approach has proven itself. It keeps the tone friendly for a long time and still documents without gaps that you did chase the payment:

• Payment reminder – the friendly nudge, usually without a fee. Very often an invoice has simply slipped through, and this one note settles the matter.
• 1st formal reminder – formal, with a new deadline and a reference to default interest and the reminder fee.
• 2nd formal reminder – final deadline, announcing further steps.

Between the levels, 10 to 14 days are common. The exact length matters less than the consistency: chasing irregularly signals that there is no hurry.

In Effizo this flow starts directly from invoicing. You set the deadlines and the reminder fee yourself, the letter carries a QR payment slip for the full outstanding amount, and the fee is booked with a document.

When nothing works: debt enforcement

If the second reminder also has no effect, the route goes through the debt enforcement office at the debtor’s domicile or registered office. You file a request for debt enforcement and advance the costs. If the other side files an objection, you need it dismissed – at which point the enforcement becomes a court procedure.

For many sole proprietorships this is the point where the effort only pays off for larger amounts. Which makes everything that happens beforehand all the more important.

Limitation periods: 5 or 10 years

Claims become time-barred. The general rule under Art. 127 CO is ten years. For many everyday transactions, however, the shorter five-year period of Art. 128 CO applies – including craft work, ordinary sales and numerous services.

A detail that is easily overlooked: a mere reminder does not interrupt the limitation period. That requires an acknowledgement of the debt by the debtor – a part payment, for instance – or a formal step such as debt enforcement or legal action.

How to keep an overview

A dunning process only works if you can see at any time which invoice is open and since when. That is exactly where it tends to break down in practice – not for lack of goodwill, but for lack of an overview.

What helps: a clear status per invoice, a fixed date each month to go through outstanding items, and bookkeeping that is kept up to date continuously rather than once a year. We have described separately how to get an overview of your finances.

Conclusion

The rules are manageable: set a concrete due date and default occurs automatically. The 5 per cent default interest is yours by law, the reminder fee only with an express contractual basis. And a staged, consistent dunning process achieves more than one sharply worded reminder after six months.

With Effizo you create invoices with a QR payment slip and chase unpaid ones in three levels – at a fixed price of CHF 120 per year. All the details are on our pricing page and under simple accounting.