Key points at a glance
- With less than CHF 500'000 in revenue in the last financial year, simple accounts of income and expenses and of your financial position are enough (Art. 957 para. 2 of the Swiss Code of Obligations, CO).
- From CHF 500'000 in revenue, you need double-entry bookkeeping with a balance sheet and an income statement.
- Every entry needs a receipt, and records must be kept for 10 years (Art. 958f CO).
- A separate business account and a clear separation of private and business finances save you and your accountant (Treuhand) the most time.
"Milchbüchlein" or double-entry bookkeeping?
The Code of Obligations distinguishes between two levels (Art. 957 CO):
| Simple accounts ("Milchbüchlein") | Double-entry bookkeeping | |
|---|---|---|
| Who | Sole proprietorships and partnerships with less than CHF 500'000 in revenue in the last financial year | Sole proprietorships with CHF 500'000 or more in revenue, every GmbH and AG |
| What | Income and expenses and the financial position | Bookkeeping and financial reporting with a balance sheet and an income statement (notes: always for GmbH and AG; sole proprietorships and partnerships only if the rules for larger companies apply, Art. 959c para. 3 CO) |
| Year-end | Statement of income, expenses and assets | Annual financial statements under Art. 958 et seq. CO |
"Financial position" means that at year-end you must be able to show what your business owns and owes - for example bank balances, unpaid customer invoices, equipment, stock and unpaid supplier invoices. Even as a small sole proprietorship, you can choose to use double-entry bookkeeping; many accountants work that way anyway.
For tax purposes: if you don't keep full commercial accounts, you enclose statements of assets and liabilities, income and expenses, and private withdrawals and contributions with your tax return (Art. 125 para. 2 DBG, Federal Act on Direct Federal Taxation, in German).
The principles - for "Milchbüchlein" accounts too
Even simple accounts must follow the principles of proper accounting (Art. 957a CO):
- complete and truthful: all business transactions, no "forgotten" cash income;
- systematic: in chronological order and by type of income or expense;
- documented: no entry without a receipt, invoice or bank statement;
- clear and verifiable: an expert must be able to find their way around within a reasonable time.
Receipts and retention
You keep your accounting records and receipts for 10 years from the end of the financial year (Art. 958f CO). Electronic storage is allowed if the records remain complete, unaltered and legible at all times (Accounting Records Ordinance (GeBüV), in German). If you are registered for VAT (MWST), longer periods apply to records relating to real estate (Art. 70 of the Value Added Tax Act, VATA). Read more in our article Receipts and VAT made easy.
Separating private and business finances
Most problems in small sets of books aren't caused by calculation errors but by mixed accounts:
- Separate business account: not mandatory, but the best investment you can make in simple bookkeeping. All your business income and expenses run through it.
- Record private withdrawals: money you pay yourself from the business account is not an expense but a private withdrawal.
- Split mixed costs: you use your car, phone or home office both privately and for business - document the business share in a way others can follow.
- Reconcile your bank account monthly: every transaction on the business account has a receipt. If one is missing, track it down right away - not in March of the following year.
Example: painting business with simple accounts
Sandro runs a small painting business with revenue of around CHF 180'000. He has a business account, records receipts as they come in and reconciles his bank account every month. At year-end, he lists unpaid customer invoices, the materials in stock and his equipment. From this, his accountant prepares the year-end closing and the documents for the tax return in a few hours - instead of working from a box full of receipts.
When is an accountant worth it?
Many sole proprietors handle the day-to-day bookkeeping themselves and leave the year-end closing and tax return to an accountant. This is especially worthwhile if you become liable for VAT, have employees, depreciate assets or approach the CHF 500'000 revenue threshold. Our article Year-end closing: what your accountant needs explains which documents your accountant needs.
How it works in Easly
Easly handles exactly the part that eats up your time day to day, and gives your accountant clean figures:
- Income and expenses: invoices and incoming payments from Easly, receipts by photo, PDF or email - with the original file, encrypted and backed up daily.
- Income statement based on paid invoices and recorded expenses, including mileage, home office and payroll costs, with drill-down to the receipt - as PDF and Excel.
- Financial position: unpaid customer invoices in the invoice overview, unpaid supplier invoices with due dates, equipment in the fixed asset register, goods in inventory - and, with the bank import (bank statement as camt.053), your bank transactions too.
- Double-entry bookkeeping if you want it: if you turn it on (it's always on for a GmbH or AG), Easly automatically posts invoices, payments, receipts, payroll and bank transactions according to the Swiss SME chart of accounts (Kontenrahmen KMU) - with journal, trial balance and an export for your accountant. Read more in our article Chart of accounts and double-entry bookkeeping.
- VAT returns and payroll are available in the same program.
- Export: all data as Excel and CSV, all receipts and documents as a ZIP file - for your accountant or for import into an accounting program.
What Easly doesn't do for you
Your accountant prepares the annual financial statements with the balance sheet and closing entries such as depreciation and accruals.
Frequently asked questions
Do I need double-entry bookkeeping as a sole proprietorship?
Only once you reach CHF 500'000 in revenue in the last financial year. Below that, accounts of income and expenses and of your financial position are enough (Art. 957 para. 2 CO).
How long do I have to keep receipts?
10 years from the end of the financial year (Art. 958f CO). Electronic storage is allowed if the records remain complete, unaltered and legible at all times.
Do I need a separate business account?
It's not required. But it makes bookkeeping much easier, because private and business finances don't get mixed up and every transaction can be matched to a receipt.
Does Easly replace my bookkeeping?
For income, expenses, receipts and the income statement, yes. If you need double-entry bookkeeping - or your accountant wants to import the entries - you turn it on in Easly: the journal is created automatically from your invoices, payments and receipts, and bank transactions are added by importing your bank statement. Your accountant prepares the annual financial statements with the balance sheet.
Information as of: see above. Sources: Swiss Code of Obligations (Art. 957, 957a, 958 et seq. and 958f CO), Accounting Records Ordinance (GeBüV) (in German), Federal Act on Direct Federal Taxation (Art. 125 DBG, in German), Value Added Tax Act (Art. 70 VATA). This article is not a substitute for advice from your accountant.