What is accounting?

It is the process of systematically recording and organizing financial data. It can be an individual, a business, or any other type of organization. It ensures that financial information is comprehensive, up-to-date, and accessible.

Why is accounting important?

Accounting is always an evergreen topic because, without it, businesses simply cannot function. The flow of money determines whether or not a company can become sufficiently successful. It's no use having lots of contacts and excellent management if you don't have the right revenue and capital flow. It plays a vital role in the workflow.

Accounting helps track incomes and expenses, ensures legality, and provides owners, investors with financial information to make business decisions.


On the other hand, it is necessary to keep accounts because every company must prepare an annual financial statement. It must include the income statement and balance sheet. These documents must reflect the company's assets and earnings, valued as accurately as possible. In short, without accurate and rigorous bookkeeping, it would be challenging to produce such documents. 

Who needs accounting?

The duty to keep accounts in Switzerland depends on the turnover gained during a financial year and the legal form of the activity.

  • Sole proprietorship + Annual turnover less than CHF 100'000

    In this case, you are obliged to keep financial accounts. However, you can do simple accounting. You have to declare your income, so it will be necessary to keep an account of your income and expenses. 

If the annual turnover from taxable supplies generated in Switzerland and/or abroad is less than CHF 100'000, the business is free from VAT'. For charitable institutions and non-profit-oriented sports and cultural associations limit is CHF 150'000.

'For VAT, you can still apply at any time.

  • Sole proprietorship + annual turnover between CHF100'000 and CHF500'000

    If the income is more than CHF100'000, it is necessary to do accounting.

    Your simple accounts must:
    Include the income and expenditure accounts, chronologically
    Include the evolution of your assets
    Include the VAT (except for exemption)
(Businesses like medical treatments and educational services that only supply goods or services in Switzerland are free from VAT.)
  • Sole proprietorship + annual turnover higher than CHF500'000

    All sole proprietorships and partnerships with a yearly turnover of more than CHF 500'000 are obliged to keep a double accounting.
    Double accounting is the one that includes the balance sheet accounts (assets and liabilities) and the profit and loss accounts (profit and loss). The main difference with simple accounting is that each income and expense is recorded twice in double accounting without details.

What do we need to book?

Every event that has happened and has taken place in the life of the company. The receipts and payments (e.g., invoices, cash receipts and payments, bank statements, etc.), and all other events (e.g., contracts, inventory, scrap records, etc.).
Finally, the enterprise must provide evidence that these events have taken place using supporting documents with mandatory elements like receipts.
The enterprise must then keep these supporting documents in case of control by the federal authorities. Both bookings and notes must match and support each other.

What is a receipt?

A receipt (note, bill) is a document created to record a financial event/transaction. For example, when a business sells something and issues an invoice or someone puts money into the bank and receives a receipt as evidence. 

Do I need an accountant in Switzerland?

You never need an accountant in Switzerland. In Switzerland, it is legal to make a simplified accounting that includes only the receipts, the expenses, and the assets if the turnover does not exceed CHF 500'000.

Requirements regarding accounting

Principles

  • the complete, truthful and systematic recording of transactions and circumstances;
    documentary proof for individual accounting procedures;
  • clarity;
  • fitness for purpose given the form and size of the undertaking;
  • verifiability.

Article 957a(2) CO

Retention of records

An accounting voucher is any written record on paper or in electronic or comparable form that is required to be able to verify the business transaction or the circumstances behind an accounting entry.

Article 957a(3) CO 

Language

It is carried out in one of the official Swiss languages or in English. It may be carried out in writing, electronically or in a comparable manner.

Article 957a(5) CO 

Currency

Accounting is carried out in the national currency or in the currency required for business operations.

Article 957a(4) CO 

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