Managing customer billing disputes
Introduction
An unpaid invoice can have two very different origins: a customer who forgets to pay, or a customer who refuses to pay by contesting the service or the invoiced amount. This distinction is crucial.
When a customer contests your invoice, you cannot simply send automatic reminders or launch a debt collection procedure. A billing dispute requires a different approach: listening, analysis, negotiation and rigorous documentation.
Most disputes find an amicable solution when they are properly managed. But without a clear method, you risk losing both your debt and your customer. Worse still: a poorly initiated procedure can backfire.
This guide presents the complete process for managing customer disputes in Switzerland. From the first dispute to legal procedures, you will discover how to defend your interests whilst preserving your business relationships. You will also find letter templates and criteria for deciding when to escalate or abandon.
📌 Summary (TL;DR)
A billing dispute is distinguished from a simple unpaid invoice by the customer's active dispute. Resolution first involves listening and analysing the merits of the claim, then documented amicable negotiation. If no agreement is reached, the formal notice formalises your position before considering Swiss legal procedures (summons, mediation or court). Rigorous preservation of evidence and professional communication remain essential throughout the process.
📚 Table of contents
- Difference between unpaid invoice and billing dispute
- Preventing disputes from the invoicing stage
- First step: listen and document the dispute
- Analysing the merits of the dispute
- Amicable resolution of the dispute
- The formal notice: moving to formal proceedings
- Legal procedures in Switzerland
- Constitution and preservation of evidence
- Managing the customer relationship during the dispute
- When to write off the debt
Difference between unpaid invoice and billing dispute
An unpaid invoice refers to a payment delay without customer dispute. The customer acknowledges the debt but does not pay on time. A billing dispute involves a formal customer dispute: the customer questions the amount, the quality of the service or the contractual conditions.
This distinction radically changes your approach. For a simple unpaid invoice, you send reminders then a debt collection procedure. For a dispute, you must first resolve the dispute before any recovery action.
Common disputes concern: an amount deemed incorrect, a service not meeting expectations, contractual conditions not respected, or VAT incorrectly applied.
For unpaid invoices without dispute, consult our complete guide on dispute management.
Preventing disputes from the invoicing stage
The best billing dispute management remains prevention. Clear and detailed invoices avoid misunderstandings: precise description of services, quantities, unit prices, explicit VAT.
Always formalise your agreements in writing: signed quotes, purchase orders, email confirmations. These documents constitute your evidence in case of dispute.
Your general terms and conditions must be explicit and communicated before the service: payment deadlines, dispute procedures, late payment penalties.
Compliant invoicing software like BePaid minimises technical errors (VAT calculations, numbering, legal mentions) and automatically centralises all your documents. This traceability becomes valuable in case of dispute.
First step: listen and document the dispute
Faced with a customer dispute, never ignore it and keep your calm. Listen carefully to the customer's arguments to understand the exact nature of the disagreement.
Immediately document all exchanges in writing. If the dispute is verbal (telephone, meeting), ask the customer to formalise it by email or letter. This written record will be essential for the follow-up.
Gather all your evidence without delay: the contested invoice, the signed quote, the contract, exchange emails, delivery notes, photos of the service, third-party testimonials.
This complete documentation will allow you to objectively analyse the situation and prepare your reasoned response.
Analysing the merits of the dispute
Objectively assess the dispute: is the customer right? Meticulously check your own documents to identify any error on your part.
Common errors to check: incorrectly calculated amount, incorrect VAT rate (8.1% instead of 2.6%), imprecise description, incorrect quantities, conditions not respected on your part.
If you identify a proven error: acknowledge it quickly and correct it. Issue a corrective invoice or credit note as appropriate. This transparency preserves the customer relationship.
If the dispute is unfounded: prepare a solid argument with all your evidence to support it. Remain factual and professional in your response.
Amicable resolution of the dispute
Amicable resolution always remains the best option: faster, less expensive, and it preserves the business relationship. It avoids legal costs and lengthy procedures.
Favour direct dialogue with the customer to understand their real expectations. Often, a billing dispute hides a communication problem or misaligned expectations.
This constructive approach succeeds in the majority of cases, especially when both parties are acting in good faith and wish to find common ground.
Proposing constructive dialogue
Contact the customer directly by telephone or propose a meeting. Direct exchanges often defuse tensions better than emails which can be misinterpreted.
Actively seek common ground: partial discount if the service has minor defects, payment instalment plan if the customer has temporary difficulties, additional service to compensate for dissatisfaction.
Remain open to negotiation whilst defending your legitimate interests. The objective is to find an acceptable solution for both parties.
Systematically keep a written record of any agreement reached, even informal, with a summary confirmation email.
Formalising the amicable agreement
If you reach an agreement, formalise it imperatively in writing: detailed confirmation email or document signed by both parties.
Clearly specify the new conditions: final adjusted amount, new payment deadline, payment terms, any additional services.
Issue a new invoice with the adjusted amount or a credit note if you reduce the initial amount. This new invoice officially replaces the contested invoice.
Explicitly mention that this agreement definitively closes the billing dispute. This clarification prevents the dispute from resurfacing later and protects both parties.
The formal notice: moving to formal proceedings
When amicable resolution fails, the formal notice constitutes the next formal step. It is an official letter that precedes legal action.
This legal document formally reminds the customer of their obligations and the consequences of persistent refusal to pay or engage in dialogue.
The formal notice marks a turning point in the relationship: you move from an amicable approach to a formal procedure that can lead to court.
When to send a formal notice
Send a formal notice after failed amicable attempts: the customer refuses dialogue, maintains a manifestly unfounded customer dispute, or ignores your resolution proposals.
Unlike a simple unpaid invoice reminder, the formal notice applies specifically to contested disputes. It sets out your legal arguments and your evidence.
This official letter precedes legal action (debt collection, court). It gives the customer a final chance to resolve the dispute before judicial escalation.
Content and form of the formal notice
An effective formal notice contains these mandatory elements:
- Complete identification of the parties (names, addresses)
- Precise reference to the contested invoice (number, date, amount)
- Factual and chronological statement of facts
- Detailed legal arguments with your evidence (contract, signed quote, emails)
- Total amount claimed with breakdown
- Response deadline (generally 10 to 15 days)
- Explicit consequences in case of non-response (legal proceedings, additional costs)
Adopt a firm but professional tone, without aggression. Send the letter by registered post with acknowledgement of receipt to prove delivery.
Formal notice template for billing dispute
Formal notice template (Switzerland)
[Your name/company name]
[Your complete address]
[Place], [date]
[Customer name]
[Customer address]
Sent by registered post with acknowledgement of receipt
Subject: Formal notice, Invoice no. [number] dated [date], Amount: [amount] CHF
Dear Sir/Madam,
By this letter, we formally give you notice to proceed with payment of our invoice no. [number] dated [date], in the amount of [amount] CHF, corresponding to [service description].
Despite our exchanges on [dates], you contest this invoice for the following reason: [dispute reason]. We formally refute this dispute for the following reasons:
[Reasoned statement with references to evidence: quote signed on [date], confirmation email dated [date], general terms and conditions accepted, etc.]
We grant you a period of 15 days from receipt of this letter to proceed with full payment or to propose a definitive amicable settlement.
After this period and in the absence of payment or acceptable proposal, we will initiate legal proceedings at your expense without further notice.
Yours faithfully,
[Signature]
Legal procedures in Switzerland
When the formal notice remains without effect, several legal remedies exist in Switzerland. The choice depends on the amount at stake, the complexity of the dispute and your willingness to preserve the relationship or not.
These procedures involve costs, delays and risks that must be assessed before proceeding. Sometimes, the cost of the procedure exceeds the amount claimed.
Three main options are available to you: debt collection, legal proceedings, or commercial mediation.
The summons procedure (debt collection)
In Switzerland, you can file a debt collection request with the Debt Collection Office of your canton. This administrative procedure is simple and inexpensive.
Warning: in case of a contested billing dispute, the customer can object within 10 days. This objection immediately blocks the debt collection. You must then go through the court to lift the objection and prove the merits of your claim.
Indicative costs: 50 to 200 CHF depending on the amount. Timeframes: a few weeks if no objection, several months in case of objection.
For complete details of the debt collection procedure, consult our guide on unpaid invoices.
Legal proceedings
Refer to the court when: the dispute is complex, the amount is significant (several thousand francs), or the customer has objected to the debt collection.
For amounts up to 30,000 CHF, the simplified procedure applies: faster and less formal. Beyond that, the ordinary procedure generally requires a lawyer.
Total costs: court fees (according to cantonal scale), lawyer's fees (150 to 400 CHF/hour), possible expert assessment. Duration: 6 months to 2 years depending on complexity.
Risks: if you lose, you pay the court costs and potentially those of the opposing party. Carefully assess the cost/benefit ratio before proceeding.
Commercial mediation
Mediation constitutes an interesting alternative to court: a neutral and professional mediator helps the parties find an amicable agreement.
Advantages: faster (a few weeks), less expensive (500 to 2,000 CHF depending on the mediator), confidential, and preserves the business relationship if you wish to continue working together.
Cantonal Chambers of Commerce and several specialised organisations offer commercial mediation services in Switzerland. Mediation works particularly well when both parties are acting in good faith but are stuck on a technical disagreement or interpretation.
The mediator does not impose a solution but facilitates dialogue so that you find common ground that is acceptable yourselves.
Constitution and preservation of evidence
In any billing dispute, your evidence determines the outcome. Without solid documentation, even a legitimate claim becomes difficult to defend in court.
Admissible evidence in Switzerland: signed contracts, accepted quotes with signature or written confirmation, purchase orders, detailed invoices, emails and SMS, registered letters, proof of delivery or service (photos, signed delivery notes), third-party witness statements.
Methodically keep all your documents in duplicate: paper version in a folder and digital version saved. Invoicing software like BePaid automatically centralises and archives all your documents: invoices, quotes, customer exchanges.
Legal deadline in Switzerland: 10 years retention for all accounting and commercial documents. Scrupulously respect this obligation.
Managing the customer relationship during the dispute
A billing dispute tests your professionalism. Remain courteous in all circumstances, even faced with an aggressive or bad-faith customer. Systematically separate the emotional from the factual.
Continue to communicate in a transparent and factual manner. Respond to requests within reasonable timeframes. This professional attitude can defuse tensions and facilitate resolution.
Decide quickly whether or not to continue the collaboration during the dispute. For ongoing contracts, assess the risks of continuing versus contractual delivery obligations.
Protect your reputation: absolutely avoid public outbursts, negative comments on social media, or inappropriate pressure. These behaviours would work against you in court.
Learn lessons from each dispute to improve your processes and avoid future disputes with other customers.
When to write off the debt
Sometimes, pursuing a billing dispute costs more than the amount claimed. This cost/benefit analysis is essential to protect your business.
Factors to consider: amount at stake (a dispute of 500 CHF does not justify 2,000 CHF in lawyer's fees), strength of your case (do you have sufficient evidence?), actual solvency of the customer (can they pay even if you win?), estimated procedure costs, time and energy mobilised.
In accounting, write off the debt as a loss via a provision for doubtful debts. This entry reflects the economic reality and reduces your taxable result.
Accepting the loss allows you to focus on your productive activity and your solvent customers. This is not a failure but a rational strategic decision.
Billing disputes are part of business life. The difference between a conflict that drags on and a quick resolution often lies in your preparation and responsiveness. Document each step, listen to your customer and always favour dialogue before legal escalation.
Clear and compliant invoicing from the outset remains your best protection. Precise general terms and conditions, QR-invoices compliant with Swiss standards and rigorous payment monitoring considerably reduce the risk of dispute. When a dispute arises despite everything, your ability to keep solid evidence and propose constructive solutions makes all the difference.
BePaid helps you prevent disputes through professional and compliant invoices, automated payment monitoring and complete documentation of your exchanges. Create your free account and test our platform for 30 days without commitment.
