Why B2B tenders require a dedicated budget
In Switzerland, many SMEs in construction, IT, facility management, logistics and professional services regularly participate in B2B tenders and contracts initiated by large companies, general contractors, cooperatives or industrial groups. Unlike public procurement, governed by the Federal Act on Public Procurement (LAPub), the Intercantonal Agreement on Public Procurement (UAPPub) and cantonal public procurement laws, private tenders are primarily based on the contract and the tender published by the client.
This contractual freedom does not mean an absence of risk: poorly planned participation can tie up liquidity, generate irrecoverable costs and create accounting liabilities that are difficult to explain at year-end closing. For an SME with 5–50 employees, responding to three or four tenders simultaneously without a structured budget can easily compromise operational capacity for the quarter.
This guide explains how to budget bid costs, assess provisional guarantees required by the client and correctly record line items in accounting, in compliance with Swiss accounting standards (Swiss Code of Obligations and GAAP/FER practice).
Private B2B tenders: what distinguishes them from public procurement
Before opening the budget, it is useful to clarify the legal context. B2B tenders between Swiss companies generally follow these principles:
Contractual freedom
The client defines requirements, award criteria, deadlines and guarantees. There is no single framework as for public procurement, except for mandatory provisions of the Swiss Code of Obligations (CO) applicable to the final contract.
Standardised documentation
Many clients use SIA-type templates, general industry conditions or internal specifications. Non-compliance results in formal exclusion, regardless of the price proposed.
Negotiable but binding guarantees
The amount and form of the provisional guarantee are set in the tender. The bank issues the commitment only after risk assessment; for an SME this may require collateral or additional credit limits.
Generally non-refundable costs
Unless otherwise provided contractually, bid preparation costs remain the bidder's responsibility. Return on investment is realised only upon award and correct execution of the contract.
Table of typical costs for participating in a B2B tender
For a tender of medium complexity (multi-year contract between CHF 200'000 and CHF 2 million), a Swiss SME should plan for the following cost items. Amounts are indicative and vary by sector and urgency.
| Cost item | Order of magnitude | Notes for the SME |
|---|---|---|
| Tender analysis and go/no-go | CHF 500–2'000 | Management time, in-house legal or consultant; documented decision to avoid non-strategic tenders |
| Technical and commercial bid preparation | CHF 3'000–15'000 | Project manager, technical staff, HR and controlling hours; higher if translations are required (DE/FR/IT) |
| External consultancy (legal, tax, expert opinion) | CHF 1'500–8'000 | Useful for penalty clauses, subcontracting, VAT treatment and civil liability |
| Samples, site visits, prototypes | CHF 0–10'000 | Common in construction, industrial supplies and custom software |
| Provisional guarantee (bank fees) | 0.5%–2.5% per annum on the amount | On CHF 50'000 guarantee for 3 months: approx. CHF 125–625 in fees, plus any fixed charges |
| Cash security deposit | 1%–5% of contract value | Amount set in the tender; direct impact on liquidity — must be considered in cash flow and not confused with a definitive cost |
| Additional insurance required | CHF 500–3'000 | Professional liability, construction insurance (construction sector; five-year legal warranty under Art. 371 CO), specific cover for tender duration |
| Administrative costs and platforms | CHF 200–1'500 | Registration on private eProcurement portals, certificates, qualified electronic signature |
Practical rule: for structured B2B tenders, many Swiss SMEs allocate between 1% and 3% of the estimated contract value as maximum participation budget, stopping earlier if the probability of award is low or if the client imposes overly penalising economic conditions.
Provisional guarantees: types and implications
The provisional guarantee (also called bid security or bid bond) assures the client that the bidder will maintain the bid until award and, if successful, will sign the contract. In Switzerland, the most common forms in B2B tenders are:
Bank guarantee
Irrevocable document issued by a Swiss or FINMA-licensed bank. Preserves operating liquidity but requires guarantee lines and adequate credit capacity. It is the form preferred by structured clients.
Blocked bank deposit
Amount blocked in a dedicated account in favour of the client. Simple to understand but immediately reduces available cash. In case of an unsuccessful outcome, funds are released; bank fees nevertheless remain the bidder's responsibility.
Surety bond
Alternative offered by surety companies. May reduce the need for collateral, but not all clients accept it. Always verify the wording required in the tender before proceeding.
Risks to consider before signing
- •Withdrawal of bid: if the bidder withdraws a valid bid or refuses the contract after award, the client may collect the provisional guarantee up to the maximum amount indicated.
- •Material errors: some tenders provide for penalties even for manifestly non-compliant bids; carefully verify validity terms and suspensive conditions.
- •Transition to definitive guarantee: upon winning, the provisional security is generally replaced by a performance bond, with new costs and greater exposure until completion of works.
SME accounting: expenses, restrictions and contingent liabilities
Under Swiss accounting standards (Art. 957 et seq. CO and GAAP/FER practice), transactions connected to a B2B tender must be recorded so that the financial statements correctly reflect costs, restricted assets and off-balance-sheet commitments. Here is the operational framework most commonly used by SMEs.
1. Bid preparation costs
Expenses incurred before award — internal staff, consultants, travel, translations — are as a rule charged to the income statement of the period in which they are incurred and cannot be capitalised on the balance sheet. After award, direct contract execution costs may be accumulated by project (e.g. work in progress), but bid preparation costs remain period expenses.
Example journal entry (amounts excl. VAT):
- Debit: 6200 Sales / marketing expenses — CHF 8'500
- Debit: 6500 Administrative expenses — CHF 2'200
- Debit: 1170 VAT on costs — CHF 870
- Credit: 1020 Bank / 2000 Accounts payable — CHF 11'570
If the bid is awarded, such costs may be tracked by project (internal WBS) to calculate the actual profitability of the contract, even though they remain historically recorded as period expenses.
2. Bank fees on provisional guarantee
Guarantee issuance fees and charges constitute financial expenses of the period, regardless of tender outcome. Such banking services are excluded from the scope of VAT (Art. 21 para. 2 lit. b VAT Act [MWSTG]).
- Debit: 6600 Financial expenses — CHF 450
- Credit: 1020 Bank — CHF 450
3. Cash security deposit
A blocked deposit is not a cost: it must be recorded as a restricted asset until release. Alternatively, if the bank blocks current account funds, liquidity is reclassified.
- Debit: 1060 Restricted security deposits — CHF 30'000
- Credit: 1020 Bank — CHF 30'000
Upon release, the entry is reversed. Any interest accrued follows the tender clauses (usually retained by the depositor).
4. Bank guarantee without cash movement
Issuing a standard bank guarantee does not involve an outflow of cash, but creates a commitment towards the bank and, indirectly, towards the client. In the financial statements:
- •Fees → income statement (financial expenses).
- •Maximum guarantee commitment → disclosure in notes to the financial statements (Eventualverbindlichkeiten / guarantee commitments), if material for business continuity.
- •Any pledge accounts or collateral → disclosure in the notes, with maximum enforceable amount.
5. After award: definitive guarantee and advance payments
Upon award, the provisional guarantee is normally returned or converted. The performance bond (often 5%–10% of the contract, according to industry practice and SIA 118 standards) follows the same accounting logic as a deposit or bank guarantee. Direct execution costs are accumulated on project transit accounts (e.g. 3400 Work in progress) and flow into the result upon invoicing, in accordance with the accrual principle.
Recommended budgeting process for management
A structured approach reduces waste and improves transparency towards the bank, shareholders and auditor. Accountex allows each expense item to be linked to a project or cost centre dedicated to the tender.
- 1
Go/no-go assessment (48–72 hours)
Verify minimum requirements, references required, expected margin, available resources and guarantee conditions. Document the decision to avoid emotional or unprofitable participation.
- 2
Formalised budget with maximum cap
Open a cost centre "Tender [Client – Year]" with management-approved budget. Any spending commitment exceeding 10% of the budget requires additional approval.
- 3
Liquidity planning for guarantees
Coordinate with the bank at least 2–3 weeks before the deadline. Consider the cumulative effect if several tenders overlap: two guarantees of CHF 40'000 each can exhaust the available lines of an SME.
- 4
Weekly monitoring and project closure
Compare actual costs vs budget. Once the tender is complete, close the cost centre and analyse variances: this data feeds more accurate estimates for future opportunities.
Quick checklist before submitting the bid
| Area | Check | Typical responsible party |
|---|---|---|
| Budget | All items charged to tender cost centre; cap not exceeded | CFO / accounting |
| Guarantee | Document compliant with tender; expiry aligned with bid validity | Administration / bank |
| Liquidity | 90-day cash flow updated with active guarantees and deposits | Treasury |
| VAT | VAT treatment of bid and costs verified (services in Switzerland / abroad); bank fees excluded from VAT scope | Trustee / accounting |
| Financial statements | Off-balance-sheet commitments noted for notes and auditor | Accounting |
| Contract | Penalty clauses, subcontracting and insurance included in pricing | Commercial management |
Conclusion: financial discipline as a competitive advantage
Participating in B2B tenders in Switzerland can open significant contracts for an SME, but the real cost of participation goes far beyond the price stated in the bid. Budgeting with precision, negotiating the form of provisional guarantee best suited to your capital structure and recording every line item in accounting methodically are steps that protect liquidity and strengthen credibility towards banks and clients.
With integrated management of cost centres, treasury and financial statement notes — as made possible by Accountex — management has a clear view of the total cost of each tender, from initial analysis to release of the security, and can decide with greater confidence which opportunities to pursue in the Swiss B2B market.