Key points at a glance
- Profit isn't the same as money in the bank. What matters is when invoices get paid and when your own payments are due.
- Invoice as soon as the work is done, with clear, short payment terms.
- For larger jobs, agree on down payments or progress invoices - right in the quote.
- A quick weekly look at your open items and a simple three-month plan prevent most cash shortfalls.
Why cash flow matters more than profit
The income statement shows whether your business is profitable. It doesn't show whether you can pay your bills. For that, timing is what counts: if you did CHF 20'000 worth of work in May but the customer only pays in July, the money is missing in June - just when rent, salaries and perhaps VAT (MWST) are due. Small businesses without large reserves in particular get into trouble this way, even when they have enough work.
Keeping track of open items
Open items (accounts receivable) are all invoices that have been sent but not yet paid. A fixed routine helps, for example every Monday:
- Which invoices are overdue? These get a payment reminder.
- Which are due in the next two weeks? That's the money you can expect to come in.
- Which customers regularly pay late? For them, shorter payment terms or a down payment make sense.
- What is finished but not yet invoiced? That's money that isn't on its way yet only because of you.
Invoicing quickly and correctly
The simplest way to improve cash flow: write invoices as soon as the work is done or the goods are delivered - not all at once at the end of the month. Make sure you include:
- clear payment terms - 10 to 30 days is common - with the due date on the invoice;
- complete details, so the invoice doesn't get held up because of a missing purchase order number;
- a correct QR-bill payment part, so your customers can pay with a single scan (see Creating a QR-bill).
If a payment date was agreed in the contract, the customer is in default as soon as it passes, without any reminder, under the Swiss Code of Obligations (CO) (Art. 102 para. 2 CO); otherwise, you need to send a reminder (Mahnung). From the date of default, the customer owes 5% default interest (Art. 104 CO). How to send friendly but effective reminders is covered in the article From quote to paid invoice.
Down payments and progress invoices
On larger jobs, you often have to pre-finance a lot for a long time: materials, your own working time, perhaps subcontractors. It doesn't have to be that way. Agree in the quote when which amounts are due, for example:
- a down payment when the order is placed,
- progress invoices after each stage or delivery,
- the final invoice on completion, minus the amounts already invoiced.
If you're registered for VAT and report on the basis of agreed consideration (invoiced basis, the standard case), you generally owe the VAT when you issue the invoice. If you receive an advance payment without an invoice, the tax is already due when the payment comes in, under the Value Added Tax Act (Art. 40 para. 1 VATA). So it's best to issue a separate invoice showing VAT for down payments.
Example: a web agency with a CHF 18'000 project
Nina quotes a client CHF 18'000 for a new online shop. The quote says: 30% when the order is placed, 40% after the design is approved, 30% after the shop goes live, each payable within 20 days. Instead of waiting three months for one large amount, she gets the money in three installments - and the first one already covers the licenses and third-party costs she has to pay at the start.
An account statement instead of a reminder
With regular customers who receive lots of invoices, it's easy to lose track - on both sides. An account statement listing all invoices, amounts paid and the open balance clears things up. It also works well as a friendly first step before you send reminders for individual invoices: often a payment has simply been matched to the wrong invoice or has been overlooked.
Simple cash flow planning
For a small business, a table covering the next three months is enough. For each month, write down:
| Item | Where to get the figure |
|---|---|
| Account balance at the start of the month | e-banking |
| + expected incoming payments | open invoices by due date, recurring subscription invoices |
| − fixed expenses | rent, salaries, insurance, leasing, subscriptions |
| − larger one-off payments | VAT (due 60 days after the end of the reporting period), provisional contributions to the AHV compensation office (Ausgleichskasse), tax installments, investments |
| = account balance at the end of the month | If it gets tight, act now - not when that month arrives. |
If a shortfall is looming, you have several options: actively follow up on open invoices, issue a progress invoice for ongoing jobs, agree on payment timing with your suppliers or talk to your bank about a credit line in good time.
How it works in Easly
In Easly, you can see at any time what money is still outstanding - and react quickly:
- Overdue invoices on the dashboard: The tile shows how many invoices are overdue and takes you to the list with one click.
- Invoice overview: all invoices with status and due date, filterable by period, status and customer, and exportable to Excel.
- Progress invoices by line item: You can invoice the line items and quantities of an order across several invoices. For each line item, Easly shows what was ordered, what has already been invoiced and what is still open.
- Payments via bank import: When you upload your bank statement (camt.053) from e-banking, Easly automatically matches the payments to your QR-bills and marks the invoices as "paid" - with the date the payment came in.
- Record and confirm a payment: Without the bank import, you mark the invoice as paid yourself. If you like, Easly prepares the payment confirmation email right away, or you can send it later with one click.
- Customer account statement as a PDF: all of a customer's invoices with the invoiced, paid and open amounts.
- Dunning in two stages: The "Payment reminder" and the "Dunning notice" are suggested or sent automatically.
You match partial payments to the invoice in the bank import; there you can see the remaining amount and write off a small remainder, such as a cash discount the customer deducted. Reminders then only ask for the remaining amount, and the customer account statement shows the invoice as "Partially paid".
Frequently asked questions
What payment terms are usual?
In Switzerland, 10 to 30 days is usual. Shorter terms get you paid faster, but they have to suit your industry. What matters is that they're clearly stated on both the quote and the invoice.
Can I ask for a down payment?
Yes, if you agree on it with the customer - ideally in the quote or order confirmation. Without such an agreement, for many types of contract payment is only due after the work has been done.
When do I owe VAT on a down payment?
If you report on the basis of agreed consideration, generally when you issue the invoice; an advance payment without an invoice is taxed when the payment comes in (Art. 40 para. 1 VATA). If you report on the basis of received consideration (cash basis), it's always the date of payment that counts.
How often should I check my open items?
Once a week is enough for most small businesses. Regularity is what matters: that way you notice an overdue invoice after a few days rather than months later.
Information as of: see above. Sources: Swiss Code of Obligations (Art. 102 and 104 CO), Value Added Tax Act (Art. 40 VATA). This article is not a substitute for advice from an accountant or lawyer.