Quotes in Switzerland: 4 details to provide

Just as the purchase order and the invoice play a key role in concluding a sale of goods and/or services, the quote is a cornerstone both commercially and from an accounting standpoint for a business. Here is a closer look at the four fields that must appear on it to make this document legally valid.

Legal value of the quote

Mandatory nature

A quote is a document required only under certain conditions, namely:

• repairs and work worth more than CHF 150;
• fee overruns in the healthcare sector worth more than CHF 70;
• removals.

Beyond these activities, issuing a quote is not mandatory, but it brings two major benefits: on one hand, once accepted, it commits the client to pay the stated rates; on the other, it lends the service provider greater credibility.

Good to know: because it is often seen as an initial, tacit commitment, drawing up a quote ahead of the service tends to increase the conversion rate among prospects.

In practice, although the requirement to issue a quote only applies to certain specific cases, it is mainly for the sake of professionalism that it is good practice to produce this document regardless.

Legal nature

Depending on whether the quote is binding (a commercial offer) or non-binding (an estimate), the rates shown will represent either the exact price of the service or an indicative price.

In other words, a binding quote commits the service provider to honour the stated rates, even if production costs turn out to be higher than expected.

Conversely, a non-binding quote provides only an estimate of the total amount and, in some cases, may not include any pricing at all. However, the estimate given may not legally be more than 10% lower than the final actual invoice for the service (this is to prevent the client from initially being promised too attractive a price because it was underestimated).

Please note: including a price in the quote that is deliberately lower than expected (to win over the prospect) is therefore unlawful.

On the service provider’s side, they too are protected by the quote, particularly in the event of late or non-payment.

Whether binding or not, the quote is generally provided to the prospect free of charge. If this is not the case, the fact that it is chargeable must be stated in advance and specified on the document.

Mandatory information on the quote

#1 Information about the signatories

Just like the invoice and the purchase order, the quote is an accounting document showing the service provider’s name and address. If the service provider is a sole trader, their first and last name will suffice. In the case of a company, its registered business name is expected.

The business identification number (UID) must also be provided. Since 2014, this has included the company’s VAT number in the following format: CHE-123.456-789 VAT.

Likewise, the client’s name and address must appear on the quote. If it is a company, it is best also to include the first and last name of the person authorised to place the order.

Finally, the quote specifies the date of the service. If it concerns the provision of services rather than the sale of goods, it is generally advisable to state its duration.

#2 Order terms

Each line states the nature, quantity and price of each service and/or item of goods concerned. This price must be expressed both excluding tax (excl. VAT) and including tax (incl. VAT).

The amount of Value Added Tax (VAT) is also shown. As a reminder, there are three different VAT rates in Switzerland:

• the standard rate of 7.7%;
• the special rate of 3.7%;
• the reduced rate of 2.5%.

Good to know: the various cases in which these rates apply are set out in our guide to Swiss VAT in 2021.

The total amount, expressed including VAT, must always be qualified with a note such as “indicative price” in the case of a non-binding quote.

Despite this indication, the service provider’s cost estimate must be as accurate as possible, since they are liable from the moment the client signs the quote.

Taking the client’s exact needs into account and listing the costs specific to the service will help you justify the amount stated on the quote.

These costs may, for example, arise from:

• raw materials;
• components;
• labour;
• logistics.

To protect yourself against a potential dispute, be sure to keep all supporting documents relating to these expenses in a safe place.

#3 Terms of sale

In addition to the pricing terms, the quote also shows the payment terms, in particular the payment methods accepted by the service provider (bank transfer, cash, cheque, etc.) as well as the payment deadlines. These remain negotiable between the two parties.

For convenience, the service provider’s bank details (account number, IBAN, etc.) may be shown at the bottom of the document. The same applies to the General Terms and Conditions of Sale (GTC), which can be attached as an appendix if needed.

#4 Validity of the quote

Making the quote a legally valid document requires adding several fields, namely:

• its reference number;
• its period of validity;
• its issue date (optional field).

It is the client’s dated signature, together with the words “approved”, that turns the quote into a genuine commercial contract binding both parties.

Finally, to ensure the process runs smoothly, make sure to:

• have the quote drawn up directly by the business owner or the person responsible, making use of existing quote templates in Excel or other accounting software;
• state that the quote was indeed drawn up before the service date;
• check that the terms of the quote remain unchanged after the client has signed and returned it.

The quote contributes as much to the company’s brand image as to converting prospects and protecting both parties in the event of a dispute. Although the prices shown are not always exact, they should be as close as possible to the actual cost of the service.

For international transactions, the exchange rate issue adds a further layer of approximation: find out how to invoice a foreign client in compliance with the rules.