Payment Deadlines and Late Payment Management
Getting paid on time is crucial for your cash flow. Here's how to manage deadlines and late payments professionally.
Legal Deadlines in Switzerland
Default deadline (no mention)
- 30 days from invoice date
- Applies if no deadline specified
- Default in CO (Art. 75)
Contractual deadline
- Can be shorter (7, 14 days)
- Or longer (60, 90 days)
- Must be clear in contract/invoice
Common practice
- Immediate: rare (subscriptions, online sales)
- 10 days: services
- 30 days: standard
- 60-90 days: large companies (abusive)
Late Payment Interest
Legal rate: 5% per year (Art. 104 CO)
Calculation
Interest = (Amount × 5% × Days late) / 365
Example: CHF 5,000 unpaid for 60 days
= (5000 × 0.05 × 60) / 365
= CHF 41.10 interest
Invoice in ToBill: automatic calculation.
Effective Reminder Process
1. Friendly Reminder (7 days late)
- Polite tone
- Maybe the payment was forgotten
- Resend invoice
2. First Reminder (15 days late)
- Firmer tone
- Mention legal deadline
- Late payment interest
- 10-day deadline
3. Formal Notice (30 days late)
- Registered letter with A/R
- Late interest calculation
- Mention collection if unpaid
- 10-day final deadline
4. Collection (45+ days late)
- Contact debt collection agency
- Or initiate payment order (OP)
- Legal costs at client's expense
Preventing Late Payments
Contractual clauses
- Clear deadline on invoice
- Late payment interest
- Down payment (30-50%)
- Progress payments
Automation with ToBill
- Automatic reminders (J+5, J+15, J+30)
- Payment status tracking
- Client payment history
- Swiss QR-bill for instant payment
Handling a Difficult Case
Client in difficulty
- Propose payment schedule
- Keep contact
- Better partial payment than none
Bad faith client
- Don't wait: act at 30 days
- Document all exchanges
- Consider payment order
Tip: 1 unpaid of CHF 5,000 = 5 hours of work lost. Prevention is essential.