Quotes in Switzerland: 4 details to provide

Just as the purchase order and the invoice play a key role in the conclusion of a sale of goods and/or services, the quotation is a cornerstone of both a company’s commercial operations and its accounting. Here’s a closer look at the four fields that must be included to ensure this document is legally valid.

Legal validity of the quotation

Required field

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

• repairs and maintenance work costing more than CHF 150;
• extra charges in the healthcare sector amounting to more than CHF 70;
• removals.

In addition to these activities, issuing a quotation is not mandatory, but it has two major benefits: firstly, once approved, it commits the client to paying the agreed rates; and secondly, it lends greater credibility to the service provider.

Good to know: As it is often seen as an initial, informal commitment, providing a quote before the service is provided tends to increase the conversion rate among potential customers.

In practice, although a quote is only required in certain specific cases, it is considered good practice to provide this document regardless, primarily for the sake of professionalism.

Legal status

Depending on whether the quotation is binding (commercial offer) or non-binding (estimate), the prices quoted will represent either the exact price of the service or a guide price, respectively.

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

Conversely, a non-binding quote provides a simple estimate of the total amount and, in some cases, may not include any pricing at all. However, the estimate provided in this way cannot legally be more than 10% lower than the final actual invoice for the service (this is to ensure that the customer is not initially promised a price that is too attractive because it has been significantly underestimated).

Please note: It is therefore illegal to include a price in a quotation that is deliberately lower than expected (in order to win over a prospective customer).

As for the service provider, they too are protected by the quotation, particularly in the event of late payment or non-payment.

Whether binding or not, a quote is usually provided to the prospective customer free of charge. If this is not the case, the fact that a charge applies must be stated in advance and clearly indicated on the document.

Required information on the quotation

#1 Information about the signatories

Like an invoice and a purchase order, a quotation is an accounting document that includes the service provider’s name and address. If the service provider is a sole trader, their first and last names will suffice. In the case of a company, its registered name will be required. 

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

Similarly, the customer’s name and address must be included on the quotation. If the customer is a business, it is advisable to also include the full name of the person authorised to place the order.

Finally, the quotation specifies the date of performance. If it relates to the provision of services rather than the sale of goods, it is generally advisable to state the duration of the service.

#2 Order terms and conditions

Each line item specifies the nature, quantity and price of each service and/or item of goods in question. This price must be shown both excluding VAT (excl. VAT) and including VAT (incl. VAT).

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

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

Good to know: You can find details of the different situations in which these rates apply in our guide to Swiss VAT in 2021.

The total amount, including VAT, must always be accompanied by a note such as “indicative price” in the case of a non-binding quotation. 

Despite this, the service provider’s cost estimate must be as accurate as possible, as they become liable as soon as the client signs the quote.

Taking the client’s exact requirements into account and listing the specific costs associated with the service will help you justify the amount quoted.

These costs may, for example, arise from:

• raw materials;
• components;
• of the workforce;
• logistics.

To protect yourself in the event of a dispute, please ensure you keep all supporting documents relating to these expenses in a safe place.

#3 Terms and Conditions

In addition to the pricing terms, the quotation also sets out the payment terms, including the payment methods accepted by the service provider (bank transfer, cash, cheque, etc.) and the payment deadlines. These terms are, however, open to negotiation between the two parties.

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

#4 Validity of the quote

To ensure that a quotation is legally valid, several fields must be included, namely:

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

It is the customer’s signed and dated signature, accompanied by the words “agreed”, that transforms the quotation into a binding commercial contract for both parties.

Finally, to ensure that the process runs smoothly, please ensure that:

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

A quotation plays as much of a part in a company’s brand image as it does in converting leads and protecting both parties in the event of a dispute. Whilst the prices quoted may not always be exact, they should be as close as possible to the actual cost of the service.

When it comes to international transactions, the issue of exchange rates further complicates matters: find out how to invoice a foreign client in accordance with the rules.