Year-end accounting in Switzerland: five steps and a preparation checklist

Who must prepare year-end accounts in Switzerland?

Swiss corporations and LLCs must keep accounts and prepare financial statements under the Code of Obligations, even with little activity. Sole proprietorships and partnerships must do so from CHF 500,000 of turnover in the preceding financial year.

Below that threshold, the latter may keep simplified records of receipts, expenses and financial position. They still need coherent year-end records and an inventory of business assets and obligations. See sole proprietor and partnership accounting for the differences.

The five steps below primarily concern double-entry accounting.

Step 1: collect documents and agree a timetable

Create a shared document list before posting adjustments. Identifying missing items early avoids repeated requests and late changes.

Assign responsibilities. The business owner confirms operational facts such as completed jobs, obsolete stock, disputes and insolvent customers. The accountant translates them into entries. An accountant cannot infer that work invoiced in January was completed in December.

Step 2: finish entries and substantiate each balance

Record missing transactions, then reconcile the ledger to external evidence. Match the bank balance to its closing statement and customer receivables to the open-invoice list.

Check payment platforms as well. A CHF 108 sale followed by a CHF 105 payout does not necessarily mean revenue of CHF 105: the CHF 3 difference may be a commission recorded separately. VAT treatment depends on the transaction.

Investigate suspense accounts. Posting an unidentified payment to an arbitrary expense merely to clear a difference weakens the accounts.

Keep concise evidence for every material balance: a statement, invoice schedule, calculation or contract. Someone should be able to understand the balance sheet after the close is complete.

Step 3: recognise income and expenses in the correct year

Under accrual accounting, payment date alone does not determine the financial year of an expense or income item. Prepayments, accruals and deferred income address timing differences. Any permitted simplifications under Article 958b(2) must be considered separately for eligible businesses.

Insurance example, excluding VAT: a business pays CHF 2,400 on 1 October for twelve months’ cover. At 31 December, three months belong to the current year: the expense is CHF 600 and the remaining CHF 1,800 is a prepaid asset.

Conversely, CHF 3,000 of services received in December may need to be accrued in December even if the invoice arrives in January. Avoid recording the same expense again when that invoice is entered.

Customer advances require similar care. Cash received is not automatically fully earned revenue. Document what has been delivered. Accounting cut-off and the timing of VAT liability must be examined separately.

Step 4: assess assets, liabilities and risks

An invoice may exist but be unlikely to be collected. A machine may remain on the ledger after being sold. Valuation involves judgement as well as arithmetic.

• Calculate depreciation and any additional impairment of fixed assets.
• Check inventory quantities and values.
• Assess doubtful receivables using actual evidence.
• Review provisions for risks and obligations, including company tax.
• Revalue foreign-currency balances and account for exchange differences.

Consider going concern. If financial difficulties cast doubt on continuing operations, the issue goes beyond adjusting profit. Asset values and the duties of the company’s governing bodies need prompt examination.

Step 5: prepare, approve and retain the accounts

For an SME incorporated as an LLC or corporation, annual accounts generally include a balance sheet, income statement and notes. A cash flow statement and management report are additionally required in the cases covered by the rules for larger businesses, subject to statutory exceptions.

The notes provide required context, such as accounting policies, guarantees, commitments and significant events after the reporting date.

The annual reporting package must be prepared and submitted to the competent body within six months of year-end. A corporation’s ordinary general meeting takes place within that period, with corresponding requirements for LLCs. Where an audit is required, schedule it before approval.

The ordinary retention period for accounting books, supporting documents and reports is ten years from the end of the financial year. Special rules can require longer retention: VAT requires twenty years for certain real-estate records, with possible further retention linked to limitation periods.

Electronic records must remain reliable and readable. Links to documents in an old, inaccessible software account are not a usable archive.

Checks after the close

Closing the books does not replace the tax return or annual VAT reconciliation. Track the relevant filing deadlines and reconcile submitted VAT returns to the final accounts.

Carry the approved closing balances into the next year. If bookkeeping has already started with provisional opening figures, update them after the final adjustments. A trial balance should demonstrate that the opening balance sheet matches the preceding closing balance sheet.

For a Geneva LLC or corporation, reconcile the annual accounts, tax schedules and evidence before preparing the company tax return. Keep year-end, approval and tax-filing dates distinct in the calendar, including any extension actually granted.

Frequently asked questions