Payment reminders and dunning in Switzerland: how SMEs proceed

When is a customer in default?

The relevant provision is Art. 102 of the Swiss Code of Obligations (CO). If a claim is due, the debtor is generally only in default once they have received a reminder. However, if the parties agreed on a specific due date, for example «payable by 31 October», default occurs when that day has passed, even without a reminder.

In practice, this means the due date must be agreed with the customer. A date that only appears on the invoice is not automatically enough. The safest option is to set the payment deadline in the quote, which the customer accepts with the order. «Payable within 30 days» is common, but whether this amounts to a specific due date is not legally clear in every case.

The usual process in three levels

1. Payment reminder: A few days after the deadline has passed, in a friendly tone. Often the invoice was simply forgotten. A new deadline of 10 to 14 days is common.
2. First dunning notice: If payment still doesn’t arrive, a firmer notice follows with another deadline. This is where any agreed dunning fees are added.
3. Final notice: It announces that further steps, for example debt collection proceedings, will follow if payment is not made.

The number of levels is not prescribed by law. What matters is a clear, consistent process, so that customers know where they stand.

What belongs in a dunning notice

• Invoice number, invoice date and original due date
• Invoice amount, payments already received and the outstanding amount
• Any dunning fees and default interest, shown separately
• A new, specific payment deadline with a date
• A payment slip for the outstanding amount, today as a QR payment part
• A sentence in case the payment is already on its way

Dunning fees and default interest

Default interest: From default onwards, the customer owes interest of 5 percent per year under Art. 104 CO, unless a different rate has been agreed in the contract. For small amounts and short delays, many SMEs waive it.

Dunning fees: The law does not recognise flat-rate dunning fees. They are enforceable if they have been agreed, for example in terms and conditions the customer has accepted. Without such an agreement, you can only claim proven damages caused by the delay in addition to default interest (Art. 106 CO).

And after the final notice?

If the final notice also has no effect, the next step is usually debt collection. You file a debt collection request with the debt collection office at the debtor’s place of residence or registered office. The office serves the debtor with a payment order. The debtor can file an objection within ten days, in which case you must enforce your claim through the courts.

Before that, a phone call or a personal message is often worthwhile. Many payment delays have simple reasons, such as a wrong address or an open question about the invoice.

Send reminders without writing letters

With payment reminders in Velro, you create the payment reminder, first dunning notice and final notice in a few clicks: with an amount summary, a new deadline and a QR payment part for the outstanding amount. If you like, Velro tells you which reminders are due or sends them automatically.

This article provides a general overview and does not replace legal advice. For specific cases, a professional such as your fiduciary or a lawyer can help.