Invoicing:
What is it?

➤ What Is Invoicing?

Invoicing is the process of billing clients for goods provided or services rendered. It involves creating a detailed document—an invoice—that outlines what was delivered, the cost, payment terms, and other essential information.

➤ Legal Requirements for Invoices in Switzerland

Switzerland has specific legal requirements for invoices to ensure transparency and compliance with tax laws. An invoice isn't just a polite request for payment; it's a legal document that could be scrutinized by tax authorities.

➤ Common Terms: Facturation and Fakturierung

• Facturation: The French term for invoicing.
• Fakturierung: The German equivalent.

Understanding these terms is crucial, especially if you operate in Switzerland's multilingual environment.

Creating a proper invoice involves more than listing services and attaching a price tag. Here are the mandatory elements:

➤ Mandatory Elements

➊. Your Business Information: Name, address, and contact details.
➋. Client Information: Name and address of the client.
➌. Invoice Number: A unique, sequential number.
➍. Date of Invoice: When the invoice is issued.
➎. Description of Goods/Services: Detailed and clear.
➏. Amount Due: Breakdown of costs and total amount.
➐. Payment Terms: Due date, payment methods, and late payment policies.
➑. VAT Information: Your VAT number and the applicable rate, if registered.

➤ VAT Considerations

If your annual turnover exceeds CHF 100,000, you're required to register for VAT. This means you need to charge VAT on your invoices and remit it to the tax authorities.

For more details on VAT registration, check out our guide on VAT Registrations.

➤ Currency and Language Requirements

• Currency: Invoices are usually issued in Swiss Francs (CHF), but you can invoice in other currencies if agreed upon.
• Language: While not legally mandated, using the client's preferred language (German, French, Italian, or English) is good practice.

➤ Examples of Swiss Invoices

Creating an invoice that meets all requirements can be daunting. For templates and examples, visit our Example Swiss Invoice page.

➤ Timing: When to Invoice

Invoice promptly to maintain cash flow. Typically, freelancers invoice:

• Upon Project Completion: For one-off projects.
• At Milestones: For longer projects.
• Monthly: For ongoing services.

➤ Setting Payment Terms and Conditions

Be clear about:

• Due Date: Standard is 30 days, but it's up to you.
• Late Payment Fees: Legal in Switzerland but must be agreed upon.
• Payment Methods: Bank transfer, PayPal, etc.

➤ Avoiding Common Invoicing Mistakes

• Incorrect Client Details: Double-check names and addresses.
• Missing Information: Ensure all mandatory elements are included.
• Typos and Errors: Proofread before sending.

➤ Using QR Codes and Digital Payments

Switzerland is embracing digital payments. Including a QR code linked to your bank details can simplify the payment process.

Learn how to integrate QR codes with our QR Invoice Developer API.

As a freelancer, you might have diverse income streams.

➤ Organizing Invoices for Different Projects

• Use Separate Invoice Numbers: Helps in tracking.
• Project Codes: Include them in your invoices.

➤ Customizing Invoices for Various Clients

Tailor invoices to meet client-specific requirements, especially for corporate clients who may have their own invoicing systems.

➤ Tracking Income from Multiple Sources

Use accounting software that consolidates all your income streams. Magic Heidi offers features for Managing Multiple Businesses as a Swiss Freelancer.

➤ Understanding VAT Rates and Thresholds

• Standard Rate: 8.1%
• Reduced Rates: 2.6% for essentials, 3.8% for accommodation services
• Registration Threshold: CHF 100,000 annual turnover

➤ Registering for VAT

If you meet the threshold, you must register.
The process varies by canton:

• VAT Registration in Zurich
• VAT Registration in Geneva
• VAT Registration in Vaud

➤ Charging VAT on Invoices

Once registered, you must:

• Include your VAT number.
• Show the VAT rate and amount separately.

➤ Filing VAT Returns

Regularly file VAT returns, usually quarterly or annually, depending on your method.

For a practical example, see VAT Practical Example.

➤ Importance of Tracking Expenses

Keeping tabs on expenses reduces your taxable income and provides a clear picture of your finances.

➤ Maximizing Tax Deductions

• Business Expenses: Office supplies, travel, software subscriptions.
• Home Office: A portion of your rent and utilities.

Discover more in our Expenses Guide and learn about Maximizing Tax Deductions.

➤ Using Software for Expense Management

Automate expense tracking with features like:

• AI Expense Scanning: Upload receipts, and let AI do the rest.
• Bank Integration: Sync transactions directly.

Explore our AI Expenses Scanning feature.

➤ Overview of Invoicing Software Options

While spreadsheets can do the job, dedicated software saves time and reduces errors.

➤ Benefits of Using Magic Heidi

Magic Heidi is designed specifically for Swiss freelancers:

• User-Friendly Interface: No learning curve.
• Swiss-Specific Features: QR-code invoices, VAT rates.
• Cross-Platform: Available on iPhone, Android, Mac, Windows, and Web.

➤ Features of Magic Heidi

• Automatic Expense Scanning: Simplify your bookkeeping.
• Bank Statement Import: Integrate your bank account.
• Customizable Invoices: Add logos, adjust layouts.
• Analytics: Get insights into your business performance.

Learn more about our Mobile Invoicing Solutions for Swiss Freelancers.

➤ Preparing Financial Reports

Accurate records make your accountant's job easier and can save you money on accounting fees.

➤ Sharing Invoices and Expenses with Accountants

• Export Functions: Provide data in accountant-friendly formats.
• Cloud Access: Let your accountant access your records directly.

Find out how in our guide on Collaborating with Your Accountant.

➤ Simplifying Tax Preparation

With everything organized, filing your tax return becomes less stressful.

➤ Invoicing in Different Currencies

• Currency Conversion: Be aware of exchange rates.
• Fees: Account for any additional transaction fees.

Our Euro Conversion tool can help.

➤ Cross-Border VAT Considerations

• EU Clients: Different VAT rules may apply.
• Digital Services: Special considerations under VAT laws.

➤ Communicating with International Clients

• Language: Consider issuing invoices in English or the client's language.
• Payment Methods: Offer options that are convenient internationally.

➤ Strategies for Managing Late Payments

• Clear Terms: State late fees in your invoices.
• Payment Reminders: Send friendly nudges.

➤ Automating Reminders

Use software to automate the process. Learn about Automating Late Payment Reminders.

➤ Legal Options for Debt Recovery

If all else fails, you may need to take legal action, though this should be a last resort.

➤ Issuing Credit Notes

If you need to correct an invoice, a credit note is the way to go. Learn how to Issue Credit Notes properly.

➤ Using Pro Forma Invoices

These are preliminary invoices sent before a service is provided or goods are delivered.

➤ Factoring and Invoice Financing

• Factoring: Sell your invoices to a third party to get cash immediately.
• Invoice Financing: Use your invoices as collateral for a loan.

• Tutorials: Visit our Tutorials page for step-by-step guides.
• FAQs: Find answers to common questions in our FAQ section.
• Help: Need assistance? Check out our Help page.
• Pricing: Explore our Pricing plans to find the one that suits you best.
• Expenses Guide: Dive deeper into managing expenses with our Expenses Guide.

Being self-employed is hard enough. Simplify your invoicing with Magic Heidi. Available on iPhone, Android, Mac, Windows, and the web.