Payment Default as a Freelancer: What to Do When Clients Don't Pay

You're a freelancer in Switzerland and invoice regularly. That uneasy feeling: the payment deadline has passed, your account remains empty, and the client won't respond. What now? The good news: Swiss law gives you clear tools — provided you use them consistently and in the right order.

Why Freelancers Are Particularly Vulnerable

Unlike an SME with credit lines or reserves, a self-employed person feels the impact of an outstanding invoice of CHF 3,000 or more immediately on cash flow. Add to that: many freelancers fear conflict with a regular client and wait too long. This weakens your negotiating position and unnecessarily prolongs the payment default.

Typical reasons why invoices don't get paid:

• The invoice disappeared in the client's email inbox.
• The contact person changed, and the invoice was never registered.
• The client has liquidity problems themselves.
• There's a content issue that was never communicated.
• The invoice is missing a mandatory field (e.g., IBAN or correct VAT details) and was blocked internally.

The last point happens more often than you'd think. So check your own invoice first before sending a dunning notice. Our guide on freelance invoicing in Switzerland helps you avoid common mistakes.

Step 1: Friendly Payment Reminder (Day 1–7 After Due Date)

Legally, a dunning notice isn't required until the debtor is in default. In practice, it's still wise to send a brief, factual reminder shortly after the payment deadline — an email is sufficient.

What to include:

• Invoice number and date
• Due date
• Outstanding amount in CHF
• Brief request for payment by a specific new date (e.g., 10 days)
• Your IBAN or QR-IBAN

Tone: neutral, no accusations. Many cases resolve at this stage.

Step 2: First Dunning Notice — Now Written and With a Deadline

If the client doesn't respond, send the first official dunning notice. From this moment, the legal default period begins. Document:

• Date of the dunning notice
• New payment deadline (typically 10–14 days)
• Notice that you reserve the right to take further steps

In Switzerland, you can demand late payment interest from the due date onwards. The statutory rate is 5% per annum (Article 104 OR). If you've stipulated a different rate in the contract or on the invoice, that applies instead.

Send the dunning notice as a PDF by email and — for larger amounts — also by registered mail. This creates evidence.

Step 3: Final Dunning Notice With Explicit Threat of Debt Collection

If the first dunning notice goes unanswered, send a final notice. State clearly: if payment doesn't arrive by [date], you will initiate debt collection proceedings. This isn't an idle threat — follow through.

Should You Charge Dunning Fees?

Generally yes, if you've stipulated this in your terms and conditions or on the invoice. Without prior agreement, flat dunning fees aren't automatically enforceable in Switzerland. Documented actual costs (e.g., registered mail postage) are recoverable as damages.

Step 4: Initiate Debt Collection Proceedings

If all dunning notices fail, debt collection is the next step. In Switzerland, the process is straightforward:

1. Identify the responsible debt collection office: The office in the debtor's place of residence or business is responsible.
2. File a debt collection petition: Online via www.betreibung.ch or in person. Fee: from CHF 18.– (depending on amount).
3. Payment order: The office issues a payment order to the debtor. They have 10 days to file an objection.
4. No objection filed: If the debtor doesn't pay and raises no objection, you can request continuation of proceedings.
5. Objection filed: The debtor contests the claim. You now need either a court judgment (lawsuit) or a debt acknowledgment to proceed.

For detailed step-by-step guidance — from the friendly reminder email to the debt enforcement petition — consult the Swiss dunning process guide.

Common Mistakes That Slow the Process

Mistake	Consequence
No written dunning notice before debt collection	Debtor can dispute default
Wrong debtor address in collection petition	Delivery fails, process is delayed
Missing IBAN on original invoice	Debtor can cite formal defect
Waiting too long (over 60 days)	Cash flow crisis on your side
Verbal reminders without documentation	No proof in dispute

VAT-Liable Freelancers: What Happens to the Tax

If you're VAT-liable and an invoice remains outstanding during the current accounting quarter, you still owe the VAT calculation — unless you use the cash accounting method. Those using the accrual method must remit VAT even if payment hasn't been received. Clarify with your accountant which method applies to you, and properly record unpaid invoices as receivables as soon as they become uncollectible — then you can correct the VAT retroactively.

For the fundamentals of VAT rates and obligations, see our article on Swiss VAT basics 2026.

Prevention: How to Reduce Payment Defaults From the Start

• Agree on advance payment: Require 30–50% upfront on larger projects.
• Set shorter payment terms: 10 or 15 days net instead of 30 days are standard for services and permissible.
• Use a Swiss QR-bill: Embedded payment information reduces typos and makes payment easier. You can create invoices with QR codes directly in the SnapBill app.
• Clear payment terms in your T&Cs: Document what applies in case of default.
• Check creditworthiness: For new clients with larger contract volumes, a quick debt register check is worthwhile.

At a Glance

• Send a payment reminder from day 1 after due date — informal and friendly.
• First dunning notice in writing, with concrete deadline and notice of further steps.
• Final dunning notice with explicit threat of debt collection proceedings.
• Debt collection through the competent office — simple, affordable, effective.
• VAT-liable freelancers clarify the accounting method with their accountant.
• Prevention beats cure: advance payments, short terms, QR-bills.