Risk & Credit Article

Writing a dunning notice: The ultimate guide plus free text template to download

Customers who do not pay invoices are annoying and may even pose a threat to the existence of SMEs. In order to still get your money, dunning notices are proven and effective. In this article, we'll tell you what needs to be on a dunning notice, what definitely doesn't, and how best to organise the dunning process - plus give you a free Word template with professional text suggestions.

Dunning is not regulated by law in Switzerland. So in principle, you can decide on your own how, when and how often you send dunning notices. Nevertheless, it makes sense to define a dunning process and to make it binding in your credit policy. We recommend the following procedure:

  • Payment reminder
  • 1st dunning notice
  • 2nd dunning notice (last dunning notice)
  • Payment demand or debt collection

Avoid debt collection, if possible

Make sure that you only initiate debt collection in severe cases. It is expensive, takes a long time and is very unpleasant for both parties. Therefore, we recommend that you seek personal contact with the customer, before starting debt collection. It's easy to ignore a dunning notice. But this is not possible during a conversation. If the customer promises to pay the outstanding amount, have this confirmed in writing. The personal conversation is also the opportunity to talk about instalment payments or an extension of the deadline. In this way you save the customer a debt collection and yourself high fees.

You decide for yourself how, when and how often you send dunning notices. In principle, you are also free by law when it comes to form. A letter is not necessarily mandatory. Email, telephone call, verbal reminder or SMS are also permitted. In Switzerland, however, it is customary to send dunning notices by letter - at least for reasons of proof.

Send the first dunning notice ten days after expiry of the original payment deadline, the second and third in each case 20 days after expiry of the deadline of the previous dunning notice. 

Also state the consequences in the dunning notice, that may arise if the invoice remains unpaid. Also enforce them if the customer is not reacting. If you do not do this, companies will not take you seriously anymore.

Dunning notice: What has to be included and what not

In any case, make it as easy as possible for your customer to assign the dunning notice to the corresponding invoice and to pay it. Therefore, it is important that the information is complete and correct. The following information belongs on the dunning notice:

  • Name and address of the customer
  • Own company name and address
  • Contact person including telephone number and email for further inquiries
  • Place and date
  • Invoice number
  • Friendly introduction, short description of the situation
  • Listing of all items of purchased goods or services
  • Total amount to be transferred
  • New payment deadline
  • Consequences of non-payment

That doesn't belong on a dunning notice:

  • Threats
  • Unfriendliness, hostility
  • Excuses

A professional formulation of the text on your dunning notices is crucial. Download our free template with text suggestions as Word file.

Stay factual in any case but nevertheless determined. Offer a contact person for possibly arising questions. Perhaps there is only a small misunderstanding that is quickly solved with a short phone call. But also don't apologise. Do not actively take on the defensive role. It can then happen that a customer sees this as a weakness and that he pays the invoice even later then.

Important: Never threaten a customer with serious disadvantages. That kind of behaviour can be coercive. Then you make yourself liable to prosecution pursuant to Article 181 of the Criminal Code.

Dunning fees yes or no?

Whether you charge dunning fees or not is up to you. If you do, then you are obliged to record this in the General Terms and Conditions and to inform the customer about it before the conclusion of the purchase.

You also determine the amount of the dunning fees yourself. In any case, please record the corresponding amounts per dunning level in the General Terms and Conditions. If you do not do this and still charge dunning fees, then your debtor is not obliged to pay them.

Default interest

The Swiss Code of Obligations regulates default interest in Art. 104 Para. 1 CO. It defines that the debtor may charge an interest of 5% of the outstanding amount. A higher interest rate is possible, but this has to be regulated compellingly in the General Terms and Conditions before conclusion of a contract.

Check creditworthiness

Do you check the creditworthiness of your customers before concluding a transaction? This prevents you from dealing with defaulting payers and at the same time ensures that you can get your money easily and quickly.

Writing a dunning notice: Free text template as Word file

Do you need a professional formulation for your payment reminders and dunning notices? Then download our free text template as a Word file. In it you will find the formulation for the payment reminder, the 1st and 2nd dunning notice.

Professional texting of dunning notices
Download a free Word file now

Download a free Word template