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Created on 26.06.2024

What to do if the customer doesn’t pay

The order has been completed, the invoice has been issued, but the customer still hasn’t paid. Outstanding payments and payment defaults can quickly become a major problem. What should companies do about unpaid invoices?

At a glance

  • Exactly how and how often late payers should be reminded is down to the companies themselves. This is not governed by law.
  • In the case of outstanding payments, it can help to follow up with the customer personally, especially if you know them – either by phone or e-mail.
  • A three-tier “reminder process” with a friendly reminder (as the first reminder), a second reminder and then a third reminder announcing debt collection proceedings is very common.
  • When it comes to payments defaults, however, prevention is better than cure. This is where digital invoicing comes in especially handy.

Do you want to learn more for your business? Our business newsletter provides handy tips and info.

An invoice can easily get overlooked or a customer might even deliberately delay payment slightly because of financial difficulties. Whatever the reason, many companies face cash flow problems due to late payments. If a payment default occurs, it’s important to respond quickly. Seeing as reminder processes are not governed by law in Switzerland, unlike in other countries, companies can decide themselves what to do about it: if a payment is outstanding after the payment deadline has passed, a company can issue a friendly reminder, a more pressing reminder, or even initiate debt collection proceedings outright. We will go through a possible reminder process in this article with you.

Communication about outstanding payments

Tip: follow up personally if need be

If you have personal contact with a debtor, or if you have customers who normally pay on time, the easiest and friendliest way to go about this process once the payment deadline has passed is to follow up with them up personally, either by phone or e-mail. Maybe the invoice didn’t reach the customer or has simply been overlooked due to things being so busy. If the customer is unable to pay in full at the time, the best case scenario is if both parties can agree on a new payment date or an instalment plan.

Send payment reminder

The reminder process generally begins with a friendly reminder which, as is evident from the term itself, is supposed to remind the customer.

Tip: how do you word a friendly reminder?

Failure to pay an invoice is rarely intentional, but rather due to oversight or a technical error. This is why we recommend phrasing payment reminders in a friendly, understanding way and describing the situation objectively.

This information should generally be included in a payment reminder

  • Beginning and closing text for a friendly reminder
  • Debtor’s company address
  • Customer’s billing address (creditor)
  • Payment reminder date of issue
  • Outstanding invoice number
  • Date of outstanding invoice and original due date
  • List of goods or services delivered
  • Outstanding amount
  • New due date (usually 10 to 14 days)
  • Bank account

Example: Template for a friendly payment reminder


Thank you for ordering from [creditor company name] and your loyalty. We hope you are happy with our service.

In busy everyday life, invoices can easily get overlooked. You are probably unaware that our invoice dated XX month 20XX has not yet been paid (or: that the invoice dated XX month 20XX is still outstanding).

We therefore kindly ask you to settle the invoice by XX month 20XX. Please ignore this reminder if you have already made the payment.

If you have any questions, you can contact us on [contact information].

Please take care of this at your earliest convenience and we look forward to continuing a good business relationship with you.

Kind regards


Useful to know: Default interest

As a rule, creditors are allowed to charge 5% default interest under the Swiss Code of Obligations from the date of the first reminder. Generally speaking, default interest is charged from the second or third reminder. Higher default interest may only be charged if this is stipulated in the GTC.

Writing pressing reminders

If a friendly reminder has no effect, more pressing reminders may be the next step. None of us likes writing reminders like this, but sometimes there is no choice. Ultimately, the company that has provided a service is entitled to be paid what they are owed.

This information should be included in a second/third reminder

  • Own company address
  • Customer’s billing address
  • Place and date
  • Outstanding invoice number
  • Services billed and outstanding amount
  • Any default interest and/or reminder fee  (if stated in the GTC)
  • New payment deadline (generally 10 to 14 days)
  • If a final reminder is sent: announce debt collection proceedings if no payment is received by the deadline specified

How should you go about wording a more pressing reminder?

The challenge of writing a more pressing reminder is obvious: on the one hand, you want to prompt the customer to pay, but on the other hand, you don’t want to damage the customer relationship. There is only one way out of this dilemma: remain polite and factual. After all, the same applies to reminders: it’s not what you say, but how you say it, and the way you say it can get more pressing the more reminders you send.

Example: Template for a second reminder


To date, we have unfortunately not received payment for the invoice dated XX month 20XX for the amount due of XX francs. Please settle the invoice by XX month 20XX.

Kind regards


Example: Template for a final reminder (third reminder)


Your payment for the invoice dated XX month 20XX is still outstanding. Please settle the outstanding amount without delay. If, by XX month 20XX, we have still not received payment, we may be compelled to initiate debt collection proceedings.

Kind regards


What to do in the event of default on payment

  1. Follow up personally either by phone or e-mail
  2. Start with a friendly (first) reminder
  3. If the friendly reminder has no effect, send a second reminder once the deadline has passed
  4. If the next deadline has passed, send the third and final reminder, announcing the initiation of debt collection proceedings

Tip: always remain factual and professional and don’t apologize for requesting payment. You are entitled to be paid for your services.

Initiate debt collection proceedings

If the final reminder doesn’t prove effective, companies either have to accept the loss or initiate debt collection proceedings

Who covers the costs of debt collection proceedings?

Creditors must pay the costs for the various steps of the debt collection proceedings in advance. If debt collection proves to be justified, the customer will have to cover the costs later on. Bear in mind that even justified debt collection proceedings may not always result in payment in instances where the debtor has gone bankrupt (legal entity) or a promissory note has been issued (natural person).

Handle debt collection with tilbago

The online payment collection solution tilbago, a PostFinance partnership, takes companies through the debt collection process in a fully automated way.

Register at The link will open in a new window You will receive an activation code and can initiate your debt collection proceedings straight away.

Prevent defaults on payments

If companies want to avoid getting into situations where they are forced to send reminders of any kind in the first place, prevention is better than cure. The following measures can help prevent outstanding payments:

Issue invoices punctually

To avoid waiting too long for their money, here are a few tips companies should consider. Invoices should always be issued promptly – ideally immediately on completion of the order. It can also be helpful to bring forward the payment due date. Anyone who has previously allowed 30 days can, for instance, stipulate in the contract that the invoice must be settled within 14 days. So even if there’s a delay in payment, you still have something of a buffer. Other options, depending on the size of the order, include advance payments or interim invoices. In some industries, discounts on early payments are also a common way of encouraging customers to settle the amount due faster. Important: the payment deadline should be clearly visible on the invoice.

Useful information

QR-bills allow quick and accurate invoicing in Swiss francs and euros. Companies can create QR-bills really easily, and customers, in turn, can pay them easily.

Tip: digitize invoices

Digitized invoice processes help ensure invoices are issued promptly. Automated processes, unlikely manual processes, ensure delays are practically impossible. In addition, the invoices can be processed accurately, which makes the invoicing process even faster. Last but not least, digital invoices lead to more reliable receipt of payment.

Thanks to PostFinance’s range of billing solutions, companies can digitize their invoice mailing to the maximum: B2B e-bills allow companies to send invoices straight to their business customers’ software, and eBill allows companies to send invoices to the online banking accounts of private customers and small companies. The good news is that payment behaviour for electronic invoices is higher. For example, 99% of eBill invoices are paid on time.

Check creditworthiness

If you have an uneasy feeling about the order or it’s a particularly lucrative transaction, you should find out more about the customer beforehand and check their creditworthiness. The creditworthiness of an individual or company reflects how likely they are to be able to honour their financial commitments.

A common way of checking the creditworthiness of customers (business and private customers) is through credit rating agencies. These agencies collect data on the payment behaviour of companies and private individuals and offer this as a service in the form of creditworthiness checks. Examples of credit rating agencies in Switzerland are Dun & Bradstreet, Creditreform, CRIF and Intrum.

Another way of checking someone’s creditworthiness is self-certification. For example, business partners may be asked to produce financial reports, a credit report they have obtained personally from credit rating agencies, references, an up-to-date excerpt from the trade register, or other documents, to plausibly demonstrate their solvency. In the case of private customers, an excerpt from the debt collection register may be useful.

Arrange an advance payment

Alternatively, the company can arrange an advance payment. In other words: the buyer makes a partial payment for goods or services before the client delivers the service. As a result, the customer pays a partial amount in advance. The partial payment acts as a guarantee that the buyer will actually receive the service promised. Even if an advance payment does require some skilful negotiating, it can prove beneficial.

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