Price indexation in B2B contracts: protecting margins from inflation and energy price increases

In multi-year B2B contracts — raw material supply, industrial maintenance, IT services, logistics or commercial leases — the price agreed today can significantly erode margins within 12–24 months. Swiss inflation, although more contained than in neighbouring European countries, and above all the volatility of energy costs and raw materials have made indexation clauses an essential management tool, not a minor legal detail.

For a company with annual turnover of CHF 2–5 million, an annual contract of CHF 200,000 without an adjustment mechanism can mean a margin loss of CHF 15,000–30,000 over two years of price increases. Conversely, for the B2B customer a transparent and predictable clause reduces the risk of contentious renegotiations and disruptions to the commercial relationship.

This guide explains how to structure indexation in Swiss contracts: legal basis, choice of indices, calculation formula, operational management and accounting implications. The goal is to protect profitability without compromising the relationship with customers and suppliers.

Swiss contract law (Code of Obligations, Art. 1 et seq. CO) allows the parties to freely determine the content and price of the contract, subject to mandatory provisions. An indexation clause is valid if drafted clearly, with reference to an objective and verifiable index, and if it does not violate the general principle of commercial fairness (Art. 2 CO).

In the absence of a specific clause, a Swiss court may in exceptional cases resort to the rebus sic stantibus clause, a doctrinal and jurisprudential principle founded on the principle of good faith (Art. 2 CO), to adapt or terminate the contract when an unforeseen and extraordinary event seriously alters the contractual balance. However, relying on this judicial remedy is costly, uncertain and slow. A preventive indexation clause is always preferable.

For contracts with the public administration or with large groups, check whether any general purchasing conditions limit or exclude automatic adjustment. In contracts with consumers (B2C) stricter rules apply; this guide focuses on business-to-business (B2B) relationships, where contractual freedom is broader.

Energy price increases affect SMEs asymmetrically: a mechanical workshop with furnaces and compressors may see electricity costs rise by 30–50% in a single financial year, while a services agency suffers a smaller impact. Applying the general CPI to an energy-intensive contract underestimates the risk; conversely, indexing entirely to energy prices for a consulting contract is difficult to justify.

A balanced approach provides for an explicit energy component in the base price, with documented proportional pass-through. Example: on a contract of CHF 500,000 per year, 15% of the price (CHF 75,000) is attributed to energy costs; the annual adjustment is calculated only on this portion, multiplying the percentage change of the agreed energy index.

For B2B gas and electricity supply contracts, also check the energy supplier's conditions: many contracts already include tariff adjustment clauses that cascade through to end-customer prices. Coordinating review dates avoids double adjustments or periods of unrecovered absorption.

From an accounting perspective, a contractual adjustment linked to an index does not constitute extraordinary revenue or cost: it is an ordinary price adjustment that is reflected proportionally in revenue and costs in the relevant period. The invoice issued at the new price should be recorded gross, with VAT calculated on the actual amount.

For multi-year contracts with advance billing (e.g. annual fee paid at the start of the year), check whether the clause provides for retroactive settlements or application only to future periods. In case of settlement, issue a debit or credit note with reference to the contract and the index calculation, maintaining consistency between economic accrual and tax documents.

For income tax purposes, price adjustments directly affect the operating margin of the financial year in which they are invoiced. There are no special tax rules for B2B indexation in Switzerland: the adjustment falls within normal operating results. For financial planning, include the expected variation of reference indices in budget scenarios (e.g. CPI according to FSO projections, energy according to market trends and applicable tariffs).

SMEs applying the full-cost method for long-term projects should update standard costs and target margins at each indexation review, to avoid significant deviations between planned and realised margins at year-end.

Resistance to the indexation clause often stems from the perception of a unilateral increase, not from unwillingness to pay a fair price. Some effective strategies in Swiss B2B negotiations:

Bilateral approach. Propose that the clause works in both directions: if the index falls, the price also decreases (with an optional floor at zero). This strengthens perceived legitimacy.

Cost transparency. Sharing the cost structure (energy share, labour, materials) demonstrates that indexation is not a pretext for extra margins, but a balancing mechanism.

Caps and advance notice. A maximum annual cap (e.g. +3%) and 30 days' notice make the adjustment predictable and acceptable for procurement departments.

Initial grace period. Excluding adjustments in the first contractual year allows the relationship to be consolidated before activating the mechanism — useful in new customer acquisition contracts.

Price indexation in B2B contracts is not a lawyer's clause to insert and forget: it is a management process that links contract drafting, management control, invoicing and the commercial relationship. For Swiss SMEs operating with multi-year contracts, integrating it systematically means reducing exposure to inflationary and energy shocks, avoiding emergency renegotiations and preserving margins compatible with business sustainability.

Start with contracts with the greatest impact on turnover or fixed costs, document calculations transparently and align price lists, invoicing and budget with the review calendar. With an accounting tool like Accountex, centralising information on indexed contracts makes it possible to trigger adjustments in good time and maintain consistency between contractual commitment, issued documents and operating results.