Accounting Obligations for Swiss SMEs: The Complete Guide
Every company in Switzerland must maintain accounting records in compliance with the Code of Obligations (art. 957 et seq. CO). Whether you operate as a sole proprietorship or an LLC, your obligations vary depending on your legal structure and turnover. This guide details precisely what the law requires, how to comply, and how to simplify your management with digital tools.
Who Must Keep Accounting Records?
Legal Obligation (art. 957 CO)
The following are subject to the obligation to keep accounting records and present financial statements:
- Sole proprietorships and partnerships with annual turnover exceeding 500'000 CHF
- All legal entities (LLC, Ltd, cooperatives), regardless of their turnover
Simplified Accounting (art. 957 para. 2 CO)
Sole proprietorships and partnerships with turnover below 500'000 CHF may keep simplified accounting records. These must include at minimum:
- A chronological record of income and expenses (cash book)
- A statement of assets and liabilities (inventory) at the end of the financial year
This is the lightest form, suited to freelancers and small self-employed professionals.
Simplified Accounting vs Double-Entry Accounting
Simplified Accounting (Income/Expenses)
Principle: you chronologically record money coming in and going out. No formal balance sheet or income statement.
What it includes:
- Income journal (invoices collected, payments received)
- Expense journal (purchases, charges, professional expenses)
- Annual inventory (list of what you own and owe as of December 31)
Advantages:
- Very simple to maintain
- No advanced accounting knowledge needed
- Perfectly suited to small structures
Limitations:
- Limited view of financial health (no balance sheet)
- Difficult to track outstanding receivables and liabilities
- Not sufficient if you exceed 500'000 CHF in turnover
Practical example:
| Date | Description | Income | Expense |
|---|---|---|---|
| 05.01 | Client invoice Dupont | 3'500 CHF | — |
| 08.01 | Office supplies purchase | — | 250 CHF |
| 12.01 | Client invoice Martin | 2'800 CHF | — |
| 15.01 | Office rent January | — | 1'200 CHF |
Double-Entry Accounting
Principle: each transaction is recorded twice (as a debit in one account and a credit in another). This is the international standard.
Mandatory for:
- All LLCs and Ltds
- Sole proprietorships with turnover > 500'000 CHF
What it includes:
- General ledger: all accounts with their movements
- Journal: chronological recording of all entries
- Balance sheet: assets and liabilities as of December 31
- Income statement: revenue and expenses for the financial year
- Notes (depending on thresholds): supplementary information
Advantages:
- Complete and reliable view of the financial situation
- Quick error detection (the trial balance must be balanced)
- Required by banks and investors
- Mandatory for the tax return of legal entities
The Swiss SME Chart of Accounts
The chart of accounts structures your accounts into categories. The SME chart of accounts (based on the Swiss model) typically includes:
| Class | Category | Examples |
|---|---|---|
| 1 | Assets | Bank, debtors, inventory, machinery |
| 2 | Liabilities | Creditors, loans, capital |
| 3 | Operating revenue | Sales, service revenue |
| 4 | Cost of materials | Purchases, subcontracting |
| 5 | Personnel costs | Salaries, social contributions |
| 6 | Other expenses | Rent, insurance, marketing, depreciation |
| 7 | Non-operating income/expenses | Interest, foreign exchange gains/losses |
| 8 | Extraordinary items | Exceptional gains/losses |
| 9 | Closing | Opening/closing balance sheet |
Your fiduciary can help you adapt this chart of accounts to your industry.
The Annual Closing Step by Step
For Sole Proprietorships (Turnover < 500'000 CHF)
- Verify the reconciliation between your journal and your bank statements
- Complete the inventory of your assets (equipment, inventory) and liabilities (unpaid supplier invoices)
- Calculate your net profit: total income - total expenses
- Prepare the documents for your tax return: income statement, list of expenses by category, inventory
No audit required.
For LLCs and Ltds
- Reconcile all accounts with bank statements and supporting documents
- Record depreciation on fixed assets (standard rates: furniture 20-25%, IT equipment 30-40%, vehicles 30-40%)
- Make provisions for known risks (taxes, disputes)
- Prepare the balance sheet and income statement in compliance with the CO
- Draft the notes if necessary (thresholds: balance sheet > 20M, turnover > 40M, > 250 employees)
- Have the accounts approved by the shareholders' meeting within 6 months of the closing date
- Submit for audit if 2 of the following 3 thresholds are exceeded: balance sheet > 20 million CHF, turnover > 40 million CHF, > 250 employees on average
Document Retention (art. 958f CO)
Duration: 10 Years
You must retain the following for 10 years from the end of the financial year:
- Management report and audit report: in signed original version
- Accounting documents: in original or on authorized medium (paper or digital)
- Books and accounting records: journal, general ledger, balance sheet, income statement
Digital Format: Conditions
The law authorizes digital retention provided that:
- Documents are readable and reproducible at all times
- Integrity is guaranteed (no modification possible)
- Storage is secure (protection against loss and unauthorized access)
Accepted formats: PDF, PDF/A (recommended for archiving), high-resolution scanned images.
ToBill guarantees:
- Secure and unlimited storage of all your documents
- Tamper-proof PDF format with timestamp
- Automatic daily backup
- Instant access from any device
Annual Accounting Calendar
Monthly Tasks
- Record all invoices issued
- Enter expenses and attach supporting documents
- Reconcile bank transactions
- Verify client payments
- Follow up on unpaid invoices
Quarterly Tasks
- VAT return (if subject)
- Trial balance verification
- Budget forecast review
- Export to fiduciary
Annual Tasks
- Annual closing (balance sheet, income statement)
- Physical inventory (if applicable)
- Depreciation
- Tax return (DFT + ICC)
- Approval of accounts (LLC/Ltd)
- Archiving of financial year documents
ToBill sends automatic reminders for each deadline, whether it is the quarterly VAT return or preparation for the annual closing.
Common Accounting Errors and Their Consequences
Most Common Errors
-
Mixing business and personal finances: open a dedicated professional bank account. Without clear separation, your accounting is unusable.
-
Delayed data entry: do not let documents pile up. Record your transactions on an ongoing basis. At year-end, catching up takes dozens of hours and generates errors.
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Missing supporting documents: systematically keep all receipts. A lost cash register receipt = a non-deductible expense during an audit.
-
Incorrect categorization: a material cost recorded as a personnel cost distorts your ratios and can alert the tax authorities.
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Forgetting depreciation: fixed assets (equipment > 1'000 CHF) must be depreciated over their useful life, not deducted in full in the year of purchase.
-
No backup: losing accounting data is catastrophic. Use a cloud-based tool with automatic backup.
Possible Consequences
- Fines: up to 1'000 CHF for violation of accounting obligations (art. 325 Swiss Criminal Code)
- Ex officio assessment: in the absence of reliable accounting, the tax authorities estimate your income (often unfavorably)
- Rejection of deductions: without supporting documents, expenses are not accepted
- Manager liability: in an LLC/Ltd, the manager can be held personally liable for proper accounting
Digitalization: Moving from Paper to Digital
Concrete Advantages
- Time savings: 70% reduction in accounting administrative time
- Error reduction: calculations are automated, no manual recopying
- Easier collaboration with your fiduciary: real-time sharing
- 24/7 mobile access: your accounting in your pocket
- Environmental benefit: drastic reduction in paper use
ToBill: Your Simplified Accounting
ToBill does not replace full accounting software (for LLCs requiring double-entry bookkeeping). However, it considerably simplifies accounting preparation:
- Intelligent receipt scanning (OCR): photograph it, ToBill extracts the data
- Automatic categorization: based on history and AI suggestions
- Automatic bank reconciliation: payments are matched to invoices
- One-click accounting export: fiduciary-compatible format (CSV, Excel, API)
- Financial dashboard: turnover, expenses, profit in real time
Monthly Checklist with ToBill
- Verify all issued invoices are recorded (automatic with ToBill)
- Scan and categorize the month's expenses (5 minutes)
- Reconcile bank statements (automatic with ToBill)
- Verify receipts and follow up on unpaid invoices (automatic)
- Export data to your fiduciary (1 click)
Total time with ToBill: 10 minutes per month instead of 2 to 3 hours manually.
The Role of the Fiduciary in Your Accounting
Even with a powerful digital tool, the fiduciary remains an essential partner for:
- The annual closing: final verification, adjustments, depreciation
- The tax return: optimization, verification of deductions
- Strategic advisory: choice of legal structure, tax planning
- Auditing (if mandatory)
- Complex questions: international VAT, restructuring, succession
ToBill facilitates collaboration with your fiduciary by automating data transfer and reducing data entry time. Result: fewer hours billed by your fiduciary = savings for you.