Keeping accounts in Switzerland: business obligations and benefits

What up-to-date accounts help you do

Bookkeeping documents business activity, supports compliance with applicable obligations and provides figures for decisions. Its usefulness also depends on timeliness: an issue identified in February is easier to address than the same issue discovered at the December year-end.

• Your accounting regime depends on legal form and, in some cases, revenue.
• Regular accounts help you monitor margins, overdue invoices and debts.
• Accounting supports returns and budgets but does not replace cash flow forecasting.
• Management retains an oversight role when bookkeeping is outsourced to an accounting firm.

Which businesses must keep accounts in Switzerland?

A Swiss limited liability company (LLC, or Sàrl/GmbH) and a corporation (SA/AG) must keep full accounts and prepare financial statements, even with little revenue. For sole proprietorships and partnerships, the reference threshold is CHF 500,000 of revenue in the previous financial year.

Below that threshold, these businesses may use simplified records of receipts, expenditure and financial position. A self-employed person generating CHF 60,000 in sales is therefore not exempt from keeping records: transactions must be explainable and the necessary documentation available.

This table covers common entrepreneurial situations. Associations, foundations and regulated sectors may be subject to specific provisions. See also accounting for sole proprietorships and partnerships.

The law is not simply a requirement to update the accounts once a year. Records must be maintained properly and transactions must remain traceable. Your working schedule should support compliance without unreliable reconstruction of past events. A monthly routine is often a sensible management choice.

Measure the real profitability of your activity

A full order book does not necessarily mean a profitable business. Sales must cover purchases, wages, premises, insurance and the other resources consumed.

Current accounts let you compare costs across periods. Does higher subcontracting expenditure correspond to more sales? Does a new service generate enough to cover the time spent delivering it? Reliable records let you test these questions.

Illustrative example, excluding VAT: a business makes CHF 40,000 of monthly sales. Purchases and external services cost CHF 15,000, with other expenses of CHF 22,000. That leaves CHF 3,000 before tax. If external costs rise to CHF 19,000 while sales remain unchanged, the result becomes a CHF 1,000 loss.

Revenue has not changed, but the economics have. A comparative income statement reveals this shift and helps you examine pricing, productivity and purchasing terms.

Anticipate cash requirements

Accounting identifies customers who still owe you money and the company’s commitments. To anticipate a liquidity shortage, add a schedule of expected receipts and payments.

Suppose your bank balance is CHF 25,000. Over the next three weeks, you must pay CHF 18,000 in salaries and supplier invoices, followed by CHF 9,000 in contributions and taxes. Without new receipts, you are CHF 2,000 short. Today’s bank balance looks comfortable; the timetable exposes the problem.

The accounts cannot guarantee that a customer will pay on time. They do help you prepare a reminder list, identify disputed amounts and avoid forecasting the same receipt twice.

Our article on company cash flow management explains how to extend this monitoring into a forecast. The horizon should reflect your billing cycles and next major payment deadlines.

Karpeo can organise regular bookkeeping and monitoring suited to your business, agreeing which information you provide and which figures you review.

Prepare returns and respond to requests

Tax returns, VAT returns and social security checks rely on figures that you must be able to explain. Organised accounting makes it easier to prepare amounts and reconcile them to supporting documents.

It also separates business transactions from private expenditure, deposits from final invoices and current-year expenses from payments relating to the previous year. These distinctions reduce late adjustments.

A recorded expense is not automatically tax-deductible. Treatment depends on its nature, evidence and the applicable rules. Equally, how you record invoices does not by itself determine your VAT reporting method. Our articles on annual VAT reconciliation and AVS employer audits explain related checks; AVS/AHV is Swiss old-age and survivors’ insurance.

Retain accounting books and supporting records for ten years from the end of the financial year, subject to any longer specific retention periods. Archives must keep documents retrievable and readable. Temporary access to an application is not a retention plan.

Make discussions with banks and business partners easier

For a financing application, a bank may request the latest annual accounts, a recent financial position and forecasts. Available figures do not guarantee credit approval, but they support a coherent application and help explain the financing need.

An interim set of accounts should state what it includes. If inventory, depreciation or accrued expenses have not yet been updated, say so. Presenting provisional profit as final can distort the discussion.

With a co-owner, the accounts provide a shared basis for discussing contributions, reimbursed expenses, profit, debts and cash. Before distributing profit, review the accounts and the company’s legal requirements. Cash in the bank is not, by itself, distributable profit.

The balance sheet helps explain how assets are financed and the role of liabilities. A valid audit opt-out does not remove the obligation to prepare accounts.

Which checks should you perform each month?

Useful monitoring can stay simple. Choose checks that lead to action, with a clear owner.

Add checks suited to your trade: cash registers for a shop, inventory for a distributor, or unbilled work for a project-based service. The number of indicators matters less than the decisions they support.

How should you divide the work with your accountant?

Good monitoring depends on both sides. Your accounting firm can post transactions, reconcile accounts and prepare the year-end close. Your business must supply documents, explain unusual transactions and flag changes in activity.

Agree how often documents are submitted, which bank access is needed, how missing invoices are handled and who approves payments. Specify who prepares and who submits each return.

If the accounts are behind, start by identifying missing periods, absent bank statements, documents to recover and outstanding returns. This establishes a realistic catch-up plan. Our article on changing accounting firms explains how to transfer an existing file; Karpeo also provides accounting catch-up support.

If you lack visibility or face a backlog, discuss your situation with us to set priorities and organise ongoing monitoring.

Frequently asked questions