Key points at a glance
- In double-entry bookkeeping, every entry has two sides: one account is debited (Soll) and another is credited (Haben) - always with the same amount.
- A GmbH or AG must always use double-entry bookkeeping. Sole proprietorships and partnerships only have to once they reach CHF 500'000 in revenue in the last financial year; below that, simple records of income, expenses and assets are enough (Art. 957 of the Swiss Code of Obligations, CO).
- You organize your accounts according to the Swiss SME chart of accounts (Kontenrahmen KMU): classes 1 and 2 for the balance sheet (what you have and who it belongs to), classes 3 to 8 for the income statement (income and expenses), class 9 for the closing.
- A private withdrawal is not an expense: it reduces your equity, not your profit. In a GmbH, the counterpart is the shareholder current account (Kontokorrent Gesellschafter).
- You can record day-to-day entries yourself. Most small businesses leave depreciation, accruals and the year-end closing to their accountant (Treuhand).
What does double-entry bookkeeping mean?
Every business transaction changes two things at once. When a customer pays an invoice, you have more money in the bank - and one less unpaid receivable. When you buy a laptop, you have one more laptop and less money. Double-entry bookkeeping records both sides: each entry debits one account (left side) and credits another account (right side) with the same amount.
This is written as a journal entry in the form "debit to credit", for example "Bank to Receivables CHF 1'081". Because every amount appears once as a debit and once as a credit, total debits always equal total credits. That's the built-in check: if the totals don't match, one side is missing somewhere.
The alternative is single-entry bookkeeping, i.e. simple income-and-expense accounting ("Milchbüchlein"): a list of money in and money out. It shows what came in and went out, but not at a glance how much customers still owe you, what you owe suppliers or how much VAT (MWST) you have to pay to the Federal Tax Administration FTA (ESTV).
Who has to use double-entry bookkeeping?
The Code of Obligations distinguishes two levels (Art. 957 CO):
| Legal form | What you must keep |
|---|---|
| Limited liability company (GmbH), corporation (AG) and other legal entities | always full accounting and financial reporting, i.e. double-entry bookkeeping with a balance sheet and income statement |
| Sole proprietorship (Einzelfirma), general and limited partnership with at least CHF 500'000 in revenue in the last financial year | also double-entry bookkeeping with a balance sheet and income statement |
| Sole proprietorship, general and limited partnership with less than CHF 500'000 in revenue | only records of income and expenses and of the financial position (Art. 957 para. 2 CO) |
The principles of proper accounting also apply "accordingly" to simple income-and-expense accounting (Art. 957 para. 3 CO). You can always choose double-entry bookkeeping voluntarily - many sole proprietorships do so once they become subject to VAT, hire employees or want their accountant to take over the entries directly. What single-entry bookkeeping involves is explained in the article Bookkeeping for sole proprietorships.
Balance sheet and income statement: the four types of accounts
Every account belongs to one of four types. Two of them make up the balance sheet, the other two the income statement:
- The balance sheet is a snapshot on a given date. On the left are the assets (Aktiven) - what the business has: cash, bank, receivables, goods, equipment. On the right are liabilities and equity (Passiven) - where the money for them comes from: debts to suppliers, banks and authorities (liabilities) and the owner's capital (equity). The law divides the balance sheet into assets and liabilities in exactly this way (Art. 959 CO), and both sides always balance.
- The income statement covers a period, usually the financial year. It sets income (sales, services) against expenses (materials, salaries, rent, insurance). The difference is the profit or loss - and at year-end, it goes into equity on the balance sheet.
The side on which an account increases depends on its type:
| Account type | Increase | Decrease | Examples |
|---|---|---|---|
| Assets | Debit | Credit | Cash, bank, receivables, input tax, vehicles |
| Liabilities and equity | Credit | Debit | Payables, VAT owed, social security, equity |
| Expenses | Debit | Credit (corrections) | Materials, salaries, rent, IT |
| Income | Credit | Debit (corrections) | Revenue from services and goods |
A rule of thumb: money coming in is a debit to the bank account. The offsetting credit tells you where it came from - a customer, a loan or you yourself.
The Swiss SME chart of accounts
The law doesn't prescribe which accounts you use or how you number them. It does, however, require a minimum structure for the balance sheet and income statement (Art. 959a and 959b CO). In Switzerland, the Swiss SME chart of accounts has become the standard for this. It is published by the professional association SwissAccounting (formerly veb.ch; authors Sterchi, Mattle, Helbling). Almost all accountants, textbooks and accounting programs use it - a free short version, the school chart of accounts for SMEs, is available on the federal government's SME portal.
The first digit of the account number is the account class; each further digit is more specific. So 1020 means: class 1 (assets), group 10 (current assets), subgroup 100 (cash and cash equivalents), account 1020 (bank).
| Class | Content | Part of |
|---|---|---|
| 1 | Assets: cash and cash equivalents, receivables, inventories, prepaid expenses and accrued income, fixed assets (equipment, vehicles, investments) | Balance sheet |
| 2 | Liabilities and equity: short- and long-term liabilities, equity | Balance sheet |
| 3 | Operating revenue from goods and services, revenue deductions | Income statement |
| 4 | Cost of materials, goods for resale, purchased services and energy | Income statement |
| 5 | Personnel expenses: salaries, social security, other personnel expenses | Income statement |
| 6 | Other operating expenses (premises, vehicles, insurance, administration, IT, advertising), depreciation, financial expenses and income | Income statement |
| 7 | Results from secondary operating activities, e.g. an ancillary business or operating real estate | Income statement |
| 8 | Non-operating, extraordinary, one-off or prior-period expenses and income, direct taxes | Income statement |
| 9 | Closing | Closing |
You don't have to adopt every account. The authors themselves say you can leave out or add individual accounts, as long as the structure stays the same.
The most important accounts for small businesses
A small service or trade business usually gets by with two to three dozen accounts. You'll need these in almost every case:
| Account | Name | Used for |
|---|---|---|
| 1000 | Cash | Cash on hand |
| 1020 | Bank | Business account; additional accounts get their own numbers (e.g. 1021) |
| 1100 | Trade receivables (Debitoren) | invoices sent but not yet paid |
| 1170 | Input tax (VAT) on materials, goods, services, energy | input tax on class 4 expenses |
| 1171 | Input tax (VAT) on investments, other operating expenses | input tax on purchases of fixed assets and on expenses in classes 5 to 8 |
| 1500–1530 | Machinery, furniture, IT equipment, vehicles | Assets used for several years |
| 2000 | Trade payables (Kreditoren) | supplier invoices received but not yet paid |
| 2200 | VAT owed (output tax) | VAT on your invoices that you owe the FTA |
| 2270 | Social security and pension institutions | Contributions you owe the AHV compensation office (Ausgleichskasse), pension fund (Pensionskasse) or accident insurer |
| 3200 | Revenue from goods | Sales of goods |
| 3400 | Revenue from services | Work, consulting, projects |
| 4000 / 4200 | Cost of materials / cost of goods for resale | Materials for jobs, goods bought for resale |
| 5000 | Wages and salaries | Employees' gross salaries |
| 5700 | Social security expenses | Employer contributions to AHV, ALV, pension fund, accident insurance |
| 6000 | Premises expenses | Rent, utilities and service charges |
| 6200 | Vehicle and transport expenses | Fuel, servicing, mileage allowance |
| 6300 | Property insurance, duties, fees, permits | Liability insurance, property insurance, fees |
| 6500 / 6570 | Administrative expenses / IT expenses | Office supplies, accountant; software, hosting |
| 6600 | Advertising expenses | Ads, website, printed materials |
| 6800 | Depreciation | Loss in value of fixed assets, usually recorded at year-end |
| 6900 / 6950 | Financial expenses / financial income | Interest, bank charges |
Equity: sole proprietorship vs. GmbH/AG
The biggest difference between the legal forms is in account group 28, equity. The law requires equity to be shown "in accordance with the legal form" (Art. 959 para. 7 CO):
| Sole proprietorship | GmbH / AG |
|---|---|
| 2800 Equity - your capital in the business at the start of the year | 2800 Share capital (Stamm- or Aktienkapital) - the capital entered in the commercial register (Handelsregister); it stays the same until the company increases or reduces it |
| 2850 Private - withdrawals and contributions during the year | 2950 Statutory retained earnings - the part of the profit the law requires the company to retain |
| 2891 Profit or loss for the year | 2970 Profit or loss carried forward - profits from previous years that have stayed in the company |
| 2979 Profit or loss for the year |
In a sole proprietorship, the private account and the result for the year are closed to equity at year-end: profit increases it, private withdrawals reduce it. In a GmbH or AG, the shareholders' meeting or general meeting decides what happens to the profit. 5% of the profit for the year goes into the statutory retained earnings until these, together with the statutory capital reserve, reach half of the registered capital (Art. 672 CO, applicable to the GmbH via Art. 801 CO). The rest is paid out or carried forward.
Private account or shareholder current account?
In a sole proprietorship, you and your business are legally the same person. If you take money for yourself, that's a private withdrawal: credit the bank, debit Private. Conversely, if you pay a business expense with your personal card or use your own car for business trips, you debit the expense and credit Private - you've contributed something to the business. Neither withdrawals nor contributions change the profit. That's also why a private withdrawal isn't a "salary" for you: you pay tax and AHV (old-age and survivors' insurance) contributions on the profit of the sole proprietorship.
A GmbH or AG is a separate legal person. You receive a salary (salary expense plus social security) and possibly a dividend. There is no "private account". Amounts that move back and forth between you and the company - you pay a company invoice privately, the company pays you an advance - go through a shareholder current account (for an AG, Kontokorrent Aktionär). It is a receivable or liability of the company and, depending on its balance, is shown under assets or liabilities. The company must show receivables from and liabilities to shareholders separately on the balance sheet or in the notes (Art. 959a para. 4 CO).
Important for tax: if you owe your GmbH money, it counts as a loan. If it is interest-free or the interest is too low, the tax authorities can treat the missing interest as a hidden profit distribution (geldwerte Leistung), subject to 35% withholding tax (Verrechnungssteuer). The FTA publishes the minimum rates each year in its circular on interest rates recognized for tax purposes (in German); for 2026, the minimum is 0.75% on advances to shareholders financed from equity. So keep the current account balance small and discuss larger amounts with your accountant.
Bookkeeping in practice: the most common transactions
The following examples assume a business that is subject to VAT and uses the effective method (standard rate 8.1%). Without VAT, simply leave out the VAT line.
| Transaction | Debit | Credit | CHF |
|---|---|---|---|
| Issuing an invoice: service CHF 1'000 plus 8.1% VAT | 1100 Receivables | 3400 Revenue from services | 1'000.00 |
| 1100 Receivables | 2200 VAT owed | 81.00 | |
| Incoming payment: the customer pays the invoice | 1020 Bank | 1100 Receivables | 1'081.00 |
| Receipt with input tax: software subscription CHF 108.10 incl. VAT, paid from the bank account | 6570 IT expenses | 1020 Bank | 100.00 |
| 1171 Input tax | 1020 Bank | 8.10 | |
| Salary: gross salary CHF 5'000, deductions AHV/IV/EO 5.3% and ALV 1.1% (simplified, without pension fund and accident insurance) | 5000 Wages and salaries | 1020 Bank (net salary) | 4'680.00 |
| 5000 Wages and salaries | 2270 Social security (deductions) | 320.00 | |
| Employer contributions AHV/IV/EO/ALV in the same amount | 5700 Social security expenses | 2270 Social security | 320.00 |
| Payment to the compensation office | 2270 Social security | 1020 Bank | 640.00 |
| Private withdrawal (sole proprietorship) | 2850 Private | 1020 Bank | 2'000.00 |
| Business expense paid privately: train ticket CHF 50 (simplified, without input tax) | 6200 Vehicle and transport expenses | 2850 Private or shareholder current account | 50.00 |
You can see the pattern: the invoice creates a receivable (receivables increase on the debit side), and the payment clears it again (receivables on the credit side). That's why the receivables account always shows what customers still owe you. Account 2270 collects the deductions and employer contributions until you pay them to the compensation office - then the account is back at zero. You record the employer contributions to the pension fund, accident and daily sickness allowance insurance and the family compensation fund (FAK) the same way when their invoices arrive.
Example: one month at Laura's graphic design studio
Laura runs a sole proprietorship and uses the effective VAT method. In March, she records: an invoice for a logo, CHF 2'000 plus CHF 162 VAT (1100 to 3400 and 2200), a software subscription of CHF 54.05 incl. CHF 4.05 VAT paid from the bank account (6570 and 1171 to 1020), the customer's payment of CHF 2'162 (1020 to 1100) and a private withdrawal of CHF 1'500 (2850 to 1020).
At the end of March, her trial balance shows: CHF 607.95 more in the bank than at the start of the month, receivables cleared, CHF 162 VAT owed, CHF 4.05 input tax, CHF 1'500 Private. The income statement shows CHF 2'000 in income and CHF 50 in expenses, i.e. a profit of CHF 1'950. The private withdrawal of CHF 1'500 doesn't reduce the profit - it only reduces her equity. Debits and credits both total CHF 5'878.05.
Journal, account ledger and trial balance
You can view the same entries in three ways:
- The journal lists all entries in chronological order: date, document number, description, debit account, credit account, amount. It's the diary of your bookkeeping.
- The account ledger (Kontoblatt) shows the entries for a single account with a running balance - for example, all transactions on "1020 Bank", which you can check against your bank statement.
- The trial balance (Saldenliste) sums up each account on one line: total debits, total credits, balance. The balance sheet and income statement are prepared from it.
Together, the journal and the accounts form the general ledger, which every business required to keep accounts must maintain. Depending on the business, there are also subsidiary ledgers such as payroll accounting or accounts receivable and accounts payable (Art. 1 of the Accounting Records Ordinance, GeBüV, in German).
Opening and closing the books
Opening: On the first day of the financial year, you carry over the closing balances of the balance sheet accounts from the previous year - bank, receivables, payables, equity and so on. The income statement accounts (classes 3 to 8) start at zero every year. For a newly founded business, the opening entry is the contribution of the starting capital; for a GmbH, for example, "Bank to Share capital CHF 20'000".
Closing: At year-end, there are additional entries that don't come with a document in your mailbox:
- Depreciation: Equipment, machinery and vehicles lose value. You must account for this loss in value with depreciation (Art. 960a para. 3 CO), for example "6800 Depreciation to 1520 IT equipment".
- Accruals and deferrals: Expenses and income belong to the year they relate to (Art. 958b CO). An insurance premium paid in December for the whole of next year is deferred to the new year via prepaid expenses (1300); the December electricity bill that only arrives in January is brought into the old year via accrued expenses (2300). If net revenue (or financial income) does not exceed CHF 100'000, accruals and deferrals may be omitted (Art. 958b para. 2 CO).
- Other closing entries: stocktaking of goods, an allowance for doubtful receivables, provisions and, for a GmbH/AG, taxes on profit.
Your accountant then prepares the annual financial statements (Jahresrechnung), consisting of the balance sheet, income statement and - depending on legal form and size - the notes. They must be prepared within six months of the end of the financial year (Art. 958 para. 3 CO). The documents your accountant needs for this are listed in the article Year-end closing: what your accountant needs.
Principles and retention
The Code of Obligations sets out five principles of proper accounting (Art. 957a para. 2 CO):
- Complete, truthful and systematic: All transactions are recorded, correctly and according to a fixed system.
- Supported by documents: No entry without a supporting document. Any record on paper or in electronic form that makes the transaction traceable counts as one (Art. 957a para. 3 CO).
- Clarity: Accounts and entry descriptions are easy to understand.
- Fit for purpose: Your bookkeeping suits the nature and size of your business - a small business doesn't need a group's chart of accounts.
- Verifiability: An expert can trace every entry from the supporting document to the annual financial statements.
Accounts are kept in Swiss francs or in the currency that is essential for the business, in a national language or in English, on paper or electronically (Art. 957a paras. 4 and 5 CO). You must keep the accounting records, supporting documents and annual financial statements for 10 years from the end of the financial year (Art. 958f CO). What's allowed in electronic form is explained in the article Retention of business records.
A short glossary
| Term | Meaning |
|---|---|
| Assets (Aktiven) | What the business owns or is owed: money, receivables, goods, fixed assets |
| Liabilities and equity (Passiven) | Where the capital comes from: debts (liabilities) and equity |
| Expenses / income (Aufwand / Ertrag) | Decrease or increase in value over a period; the difference is the profit |
| Debit / credit (Soll / Haben) | left and right side of an account |
| Journal entry (Buchungssatz) | "Debit account to credit account, amount" |
| Offsetting account (Gegenkonto) | the second account in an entry, e.g. bank charges as the offsetting account to the bank |
| Balance (Saldo) | Difference between the debits and credits of an account |
| Receivables / payables (Debitoren / Kreditoren) | unpaid invoices to customers / from suppliers |
| Input tax (Vorsteuer) | VAT on your purchases that you can deduct from the VAT you owe |
| Depreciation (Abschreibung) | Loss in value of a fixed asset, recorded as an expense |
| Accruals and deferrals (Rechnungsabgrenzung) | Moving expenses or income into the correct financial year |
| Private (Privat) | Sole proprietorship account for the owner's withdrawals and contributions |
| Shareholder current account (Kontokorrent Gesellschafter) | running account between the GmbH/AG and a shareholder |
| Journal / account ledger / trial balance | all entries by date / one account with its balance / all accounts with totals and balances |
How it works in Easly
Easly keeps double-entry books automatically based on the SME chart of accounts - you never enter anything twice:
- Journal from your data: Sent invoices, incoming payments, expenses, mileage claims, home office, payslips and bank transactions produce the journal with debit and credit accounts, for example "Receivables 1100 to revenue and VAT owed" on the invoice date. Because it is rebuilt every time you open it, it always matches your invoices and receipts.
- Chart of accounts by legal form: For a GmbH or AG, bookkeeping is always on, with share capital, reserves, profit carried forward and shareholder current account. For sole proprietorships and partnerships, you turn it on under "Bank & accounting > Double-entry bookkeeping"; you then get Equity and Private accounts. You can adapt numbers and names to your accountant's chart of accounts.
- Bank import with offset account: Transactions that aren't an invoice or an expense - bank charges, payments to the compensation office, VAT payments to the FTA, private withdrawals - can be posted directly to an offset account. Easly remembers the account for each counterparty.
- Supplier invoices via payables: Easly records an unpaid invoice on the invoice date as "Expense to Payables 2000" and the payment from the bank import as "Payables to Bank" - if the reference and amount match, Easly matches them automatically.
- Trial balance and account ledger: The trial balance shows debits, credits and balance for each account for the selected period. If you enter the start date of your bookkeeping and the opening balances from the closing balance sheet in the chart of accounts, it also shows the balance carried forward for balance sheet accounts. Click an account to open its ledger with a running balance.
- Manual entries and period lock: You record private contributions, depreciation or accruals with debit, credit and amount. After the closing, you lock the year: Easly freezes the journal, and entries dated in that period can no longer be changed.
- Export for your accountant: Journal, trial balance and chart of accounts as Excel, and the journal as CSV or in the import format of Banana Accounting. Your accountant prepares the year-end closing with closing entries, balance sheet and income statement.
Frequently asked questions
Do I need double-entry bookkeeping for my sole proprietorship?
Only once you've had at least CHF 500'000 in revenue in the last financial year (Art. 957 para. 1 CO). Below that, records of income, expenses and your financial position are enough. You can switch to double-entry bookkeeping voluntarily at any time - it's often worth it once you're subject to VAT or have employees.
Do I have to use the Swiss SME chart of accounts?
No, the law doesn't prescribe a specific chart of accounts. However, the balance sheet and income statement must follow a minimum structure (Art. 959a and 959b CO), and the SME chart of accounts is aligned with it. Since practically all accounting firms and programs use it, it saves you a lot of converting.
Is a private withdrawal an expense?
No. In a sole proprietorship, a private withdrawal reduces your equity, not the profit. You pay tax and AHV contributions on the profit, no matter how much you withdrew. In a GmbH or AG, you draw a salary instead, which is an expense, or a dividend paid out of profit.
What's the difference between 1170 and 1171?
Both are input tax accounts. 1170 is for input tax on materials, goods, services and energy (class 4 expenses), 1171 for input tax on investments and other operating expenses. The split matches the two input tax boxes on the FTA's VAT return form.
What do I do myself, and what does my accountant do?
With a good program, you can handle the day-to-day entries - invoices, payments, receipts, payroll - yourself. Most small businesses leave depreciation, accruals, provisions, taxes and the annual financial statements to their accountant. The cleaner your journal, the fewer hours they'll bill you.
Information as of: see above. Sources: Swiss Code of Obligations (Art. 672, 801, 957, 957a, 958, 958b, 958f, 959, 959a, 959b and 960a CO), Accounting Records Ordinance (Art. 1 GeBüV; in German), school chart of accounts for SMEs (Mattle, Helbling, Pfaff, © SwissAccounting, on kmu.admin.ch) as a short version of the Swiss SME chart of accounts, FTA circular "Interest rates recognized for tax purposes in 2026 for advances or loans in Swiss francs" of January 29, 2026 (in German). Account numbers and names may differ slightly depending on the edition of the chart of accounts and your accountant's chart of accounts. The sample entries are simplified. This article does not replace advice from your accountant.