Karpeo · Business in Switzerland
Managing a business through a crisis in Switzerland
When a business faces a crisis, the first priorities are to understand the situation, protect available cash and make documented decisions without delaying the legal steps that may be required.
By Sarah Prieur · Swiss certified public accountant
What should a business in crisis do first?
Establish how much cash is actually available, identify the next payment deadlines and assess whether the business can become viable again. Then implement a realistic action plan while respecting the duties that arise when solvency or equity is at risk.
Cutting every expense by the same percentage is not enough. Some spending is essential to production or collecting payments. Other costs can be deferred without jeopardising operations. Priorities depend on the practical consequences of each decision.
This article provides a management framework for an SME. It does not replace a legal assessment where debts cannot be paid or there are signs of over-indebtedness.
In the first few days, gather up-to-date figures, identify who is responsible for decisions and pause unnecessary new commitments. Avoid both carrying on as though nothing has changed and abruptly stopping a profitable activity without assessing the consequences.
Is the problem profitability or cash flow?
A crisis can have several causes: falling demand, weaker margins, a major customer default or longer payment terms. A poorly financed investment can also absorb cash even when trading remains profitable.
| Warning sign | Question to investigate | Information needed |
|---|---|---|
| Falling sales | Fewer customers, lower prices or seasonal demand? | Orders, invoices and sales pipeline |
| Falling margin | Higher direct costs or a less profitable sales mix? | Margin by service or product |
| Little cash despite a profit | Where is the money tied up? | Receivables, inventory, investment and loan repayments |
| Repeated late payments | A temporary gap or a structural problem? | A complete schedule of debts and due dates |
| Deteriorating equity | Have duties to take corrective action been triggered? | Reliable accounts and a legal assessment |
The income statement measures performance over a period. The balance sheet shows assets and liabilities at a particular date. Neither replaces a schedule of cash receipts and payments.
Find the causes, not only the symptoms
A low bank balance may reflect rapid growth: more stock and staff must be funded before customers pay. Conversely, a comfortable balance can conceal losses if the company has just received a loan. Separate operating activity, financing and exceptional events.
Ask whether each additional sale still generates a positive contribution and whether that contribution is sufficient to cover fixed costs. A substantial discount can speed up sales while making the crisis worse. Calculate its effect on margin and cash requirements before accepting it.
Build a rolling 13-week cash-flow forecast
Thirteen weeks is a practical planning horizon used here, not a statutory requirement. Weekly detail makes upcoming deadlines visible while covering several invoicing cycles.
Start with the bank balance you can actually use. Separate restricted funds and do not treat a credit facility still under negotiation as confirmed funding. For each week, record receipts on realistic payment dates, followed by wages, social contributions, suppliers, rent, tax, VAT and financing instalments.
VAT may be included in customer and supplier invoice cash flows and subsequently settled with the tax authority. Check how your model handles it to avoid double counting.
A simplified example
A company starts a week with CHF 45,000. It expects receipts of CHF 20,000 and payments of CHF 38,000.
Forecast closing cash: 45,000 + 20,000 − 38,000 = CHF 27,000.
If a customer delays an expected CHF 15,000 payment by two weeks, the closing balance falls to CHF 12,000. Accounting profit does not necessarily change, but the ability to meet the next deadlines does.
Prepare a central scenario and a downside scenario. The latter might include a customer delay, lower sales or unplanned maintenance. The purpose is to identify when the plan stops working, rather than to predict the future with certainty.
Update the forecast each week
Replace elapsed forecasts with actual cash movements and explain differences. Then add another week. This discipline is more useful than a highly detailed spreadsheet that is never updated. Our article on managing company cash flow explains the mechanisms to monitor.
Turn the diagnosis into measurable actions
Assign each measure an owner, a deadline and an expected effect. “Reduce costs” is not measurable. “Cancel two unused subscriptions before renewal to save CHF 300 a month” is.
Collect payments sooner without damaging customer relationships
Invoice promptly for work delivered. Check billing details, purchase-order references and disputes holding up payment. Follow up systematically and document agreed payment dates.
Where the contract and commercial relationship permit, a deposit or milestone billing can reduce the cash needed to finance a long project. An oral promise is not a guaranteed receipt.
Cut costs selectively
Classify spending by its purpose, cancellation terms and the effect of removing it. Some savings only start after a notice period or an exit fee. Protect the activities needed for safety, compliance and profitable delivery.
Removing an essential order-processing tool may reduce one bill while destroying more revenue. Use a consistent method to track business expenses and distinguish a lasting saving from a deferred payment.
Negotiate before the due date
Present banks and suppliers with a quantified plan and explicit assumptions. A specific rescheduling request is more credible than a general promise to pay soon. Obtain confirmation of any agreement.
An extension granted by one supplier does not change tax, social-insurance or bank deadlines owed to other creditors. Measures affecting employees also require an assessment of contracts, collective agreements and the applicable employment law.
Which legal duties must not be delayed?
For Swiss corporations (SA/AG) and, by reference, limited liability companies (Sàrl/GmbH), the Code of Obligations distinguishes impending insolvency, capital loss and over-indebtedness. These situations cannot be assessed using the bank balance alone.
Where insolvency threatens, the governing bodies must monitor solvency and act promptly to take the necessary measures. A capital loss can trigger corrective action and specific requirements for the accounts. Where there is justified concern about over-indebtedness, the statutory requirements for interim accounts and their audit must be addressed.
The maximum 90-day period available under certain conditions to remedy over-indebtedness is not an automatic grace period. In particular, there must be a reasonable prospect of remedying it within the legal timeframe without further jeopardising creditors. The starting point and all conditions require careful examination.
A qualifying subordination of claims can affect the legal treatment of over-indebtedness. However, it creates no cash and does not itself restore profitability. See our explanation of capital loss and over-indebtedness under Articles 725–725c CO. Seek professional assistance when warning signs arise; do not wait for the annual accounts.
Avoid decisions that increase the risk
Do not transfer assets to relatives or shareholders to place them beyond creditors’ reach. Do not present deliberately misleading accounts or forecasts to a lender. Repayments, distributions and new commitments must be assessed against the company’s position and the duties of its governing bodies.
If continued trading is no longer viable, consider the relevant restructuring or insolvency procedures. Ordinary voluntary liquidation is not an automatic substitute for dealing with insolvency. Our article on business bankruptcy in Switzerland explains the distinctions.
Organise monitoring and communication
Hold a short, regular management meeting to answer three questions: what has changed, what decisions are needed and who will implement them?
Maintain an action tracker and records of decisions taken by the responsible governing bodies. Documenting assumptions, options considered and reasons for decisions improves communication and avoids rewriting the history afterwards.
Keep communications with employees factual. Distinguish decisions already made, scenarios being considered and points still uncertain. Organised transparency does not mean disclosing confidential information without appropriate care.
Set triggers for reassessment: a major customer misses an agreed date, funding is refused or the margin falls below the minimum assumption. Each trigger should lead to a fresh decision, rather than mechanically extending a plan that no longer works.
If the revised forecast shows a funding need, compare the available financing options for a Swiss business. New borrowing must be assessed alongside repayment capacity and the legal duties triggered by financial distress.
Frequently asked questions about business crisis management
Can a profitable business run out of cash?
Yes. Customers may pay later than suppliers, stock can tie up money and loan repayments consume cash. Accounting profit and the bank balance measure different things.
Should you immediately cut all non-payroll spending?
No. Assess the purpose of each expense, contractual commitments and the consequences of stopping it. A saving that prevents delivery or invoicing can make the situation worse.
Will a loan solve a business crisis?
A loan can fund a temporary gap, but it does not automatically fix a structurally loss-making business. The plan should explain how the money will be used and repaid.
Can directors wait 90 days before acting on over-indebtedness?
No. The governing bodies must act promptly. The maximum period available under specific legal conditions is not general permission to delay action or notification of the court.
How often should the forecast be reviewed?
Weekly review is a useful starting point when cash is tight. Some deadlines require daily monitoring. The frequency should reflect how quickly the risk is changing and the cash buffer available.
Sources and references
English edition reviewed on 10 October 2026. The numerical example is illustrative. The legal rules apply within the scope described; individual circumstances may require further analysis.
About the author
Sarah Prieur
Sarah Prieur is a Swiss certified public accountant, a partner and head of operations at Karpeo. She supports businesses, self-employed professionals and entrepreneurs with accounting, tax and VAT matters. Before joining Karpeo, she spent eight years in financial audit at PwC Switzerland, progressing to manager.
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