Opening balances in Switzerland: how to carry your accounts forward
Opening balances connect one financial year to the next. They preserve assets, liabilities and equity without creating new revenue. Follow a practical checking method after year-end closing or a change of accounting software.
By Sarah Prieur · Swiss certified accountant
Opening balances: the essentials
Opening balances are the amounts in balance sheet accounts at the start of a financial year. For a continuing business, they carry forward the final closing balances from the previous year.
- Balance sheet accounts are carried forward; the new year’s income and expense accounts start at zero.
- The previous year’s profit or loss remains within equity.
- A matching balance sheet total is not enough: outstanding invoices and supporting details must also reconcile.
- The number of any opening balance clearing account depends on the software and chart of accounts.
Which accounts should be carried forward?
The balance sheet presents assets, liabilities and equity. Those balances do not disappear at midnight on the last day of the year: money remains in the bank, customers still owe their invoices and loans remain payable.
In the Swiss SME chart of accounts, classes 1 and 2 cover assets and liabilities/equity respectively. Equity is part of class 2. Classes 3 to 8 mainly cover income and expenses and are not carried forward as activity of the new year.
An opening trial balance lists individual accounts and their balances. An opening balance sheet groups those accounts for presentation. They describe the same financial position at different levels of detail.
A comparative income statement can, of course, display the previous year’s figures. That comparative column does not mean the previous year’s income and expenses have been posted again in the new year.
Example of a balanced opening position
Consider a Swiss LLC with a 31 December year-end. These illustrative amounts represent its position after closing:
| Item | Debit balance | Credit balance |
|---|---|---|
| Bank | CHF 25,000 | — |
| Trade receivables | CHF 12,000 | — |
| Equipment, net carrying amount | CHF 8,000 | — |
| Trade payables | — | CHF 9,000 |
| Other liabilities | — | CHF 4,000 |
| Share capital | — | CHF 20,000 |
| Retained earnings, including the previous year’s result | — | CHF 12,000 |
| Total | CHF 45,000 | CHF 45,000 |
These amounts are carried forward on 1 January. The CHF 25,000 bank balance does not become revenue, and the CHF 9,000 payable to suppliers does not become a new expense.
When a customer later pays an old CHF 2,000 invoice, the entry increases Bank and reduces Trade receivables. It does not recreate revenue already recognised in the previous year. Counting that revenue twice is a common risk when opening balances have not been prepared properly.
How do opening journal entries work?
Some accounting systems carry balances forward directly. Others generate entries through a technical account called “Opening balance”. Account 9000 is used in some charts, but the Code of Obligations does not prescribe one universal account number.
Using a clearing account, the example would produce these entries:
| Debit | Credit | Amount |
|---|---|---|
| Bank | Opening balance clearing | CHF 25,000 |
| Trade receivables | Opening balance clearing | CHF 12,000 |
| Equipment | Opening balance clearing | CHF 8,000 |
| Opening balance clearing | Trade payables | CHF 9,000 |
| Opening balance clearing | Other liabilities | CHF 4,000 |
| Opening balance clearing | Share capital | CHF 20,000 |
| Opening balance clearing | Retained earnings | CHF 12,000 |
The clearing account receives CHF 45,000 on each side and finishes at zero. A remaining balance needs investigation: an omission, reversed debit and credit, or duplicate entry may explain it. Our article on journal entries and debits and credits explains the underlying mechanics.
Do not create a second manual opening if the software has already generated one. Establish exactly how the system works before importing data.
Five checks for reliable opening balances
- Choose the right closing version. Use the final trial balance from annual closing. If the accounts are provisional, identify the version and extraction date.
- Check the previous year’s result. It must appear in equity once. A later decision on profit allocation is a separate transaction; the software must not invent a distribution to owners.
- Compare every account. Reconcile closing and opening balances line by line. If the chart of accounts changes, retain a mapping showing where each old balance has gone.
- Reconcile the supporting ledgers. Outstanding customer invoices must total the receivables control account. Apply the same logic to suppliers, fixed assets, loans and owner accounts.
- Confirm there is no new-year profit effect. Opening entries must not generate current-year revenue or expenses. Check the clearing account and total debits and credits too.
Changing software: which details must be preserved?
Importing only balance sheet totals can make later payments difficult to match. Transfer open invoices with their dates, due dates, numbers and remaining balances. Keep credit notes and advances, which can explain unusual account balances.
Where fixed assets use accumulated depreciation accounts, carry forward acquisition cost and accumulated depreciation separately if the system and chart distinguish them. A net figure alone may not be enough to continue the depreciation schedule correctly.
For foreign currency accounts, preserve both the foreign currency amount and its accounting equivalent. A correct CHF figure can conceal an incorrect EUR balance and generate false exchange differences later.
VAT settings must prevent transactions already reported from being declared twice. If VAT is accounted for on received consideration, later collection of old invoices may still have a VAT consequence. Configure the opening entries according to the method actually used.
Our article on choosing Swiss accounting software covers further migration considerations.
What if the previous year’s closing figures change?
January often begins before the previous year’s closing work is complete. You can use provisional opening balances and update them once final adjustments are made.
The method depends on the software: automatic recalculation, replacement of the import or additional entries. In every case, retain a record of changed amounts and check that the original opening has not been kept as a duplicate.
If an error affects accounts already approved or a tax return already filed, do not silently change the opening balances. Determine the appropriate correction, which documents need updating and whether a tax correction is required. Traceability matters as much as mathematical balance.
Frequently asked questions
Must I use account 9000?
No. It is a convention used in some systems. The objective is a complete, balanced and traceable opening, regardless of the clearing account number.
Should expense accounts have opening balances?
They normally start at zero in the new financial year. Prepaid expenses, however, remain on the balance sheet as assets and are charged to the period they relate to.
Where does the previous year’s profit go?
It remains within equity according to the presentation and accounts used. Valid profit allocation decisions are recorded separately; a distribution should not be anticipated.
Does a new company carry forward earlier balances?
A newly formed company records its initial transactions, such as capital, contributions and costs. It does not necessarily have a previous financial year to carry forward. A business takeover or legal transformation requires separate analysis.
How can I tell whether the opening is correct?
Compare every balance to the final closing figures, reconcile open invoices and confirm that new-year profit is unaffected. A balance sheet that balances can still contain classification errors.
Sources
- Swiss Code of Obligations, Articles 957a, 958c and 958f: completeness, consistency and record retention. The English translation is informative; the official-language texts are authoritative.
- SECO SME portal: compulsory accounting: supporting documents and evidence of the financial position.
- Federal Tax Administration: the VAT audit process (in French): the distinction between invoice-basis and payment-basis reporting.
