Accounting obligations for companies in Switzerland: A guide for founders

Bookkeeping is an essential part of every successful start-up. It not only provides you with an overview of your finances, but is also required by law. However, the accounting requirements differ depending on the legal form and size of the company. In this article, we explain which accounting obligations apply to different legal forms in Switzerland, what the audit involves and which tools will help you to manage your accounting efficiently.

Bookkeeping obligation in Switzerland: Who has to keep accounts?

In Switzerland, all companies that operate in accordance with the Swiss Code of Obligations (CO) are required to keep accounts. The requirements depend on the legal formthe turnover and the size of the company. A basic distinction is made between single-entry bookkeeping (milk booklet accounting) and double-entry bookkeeping.

Sole proprietorship and general partnership

For individual companies and general partnerships are subject to different accounting obligations depending on whether their turnover is above or below CHF 500,000 per year:

• Turnover under CHF 500,000Companies with a low turnover are only obliged to keep simplified accounts. This means that a simple income and expenditure account (milk book calculation) is sufficient. Only the income and expenses are documented in order to determine the taxable profit.
• Turnover over CHF 500,000: In this case a double-entry bookkeeping is required. This means that all business transactions must be recorded with debits and credits in order to draw up a balance sheet and an income statement.

GmbH and Public Limited Company

Corporations such as the limited liability company and the Public Limited Company Company are always obliged to keep double-entry accounts, regardless of their turnover. This includes the following obligations:

• Double-entry bookkeepingRecording of all income and expenditure and annual preparation of an annual financial statement consisting of at least a balance sheet, income statement and notes.

What is an audit and when is it necessary?

The audit is an external review of the accounts by independent auditors. It serves to ensure that the accounts are kept correctly and that the legal requirements are complied with. There are two types of audit: The ordinary audit and the limited audit.

Ordinary audit

The ordinary audit is mandatory for larger companies. It is required if a company meets at least two of the following criteria in two consecutive financial years:

• Balance sheet total of CHF 20 million
• Sales revenue of CHF 40 million
• 250 full-time positions on an annual average

An ordinary audit is more comprehensive and detailed than a limited audit. It is usually carried out by larger auditing companies and audits not only the accounts, but also internal control systems.

Limited audit

Smaller corporations such as the GmbH or Public Limited Company must undergo a limited audit if they do not meet the above-mentioned criteria. above fulfill the above criteria.

However, the limited audit may be waived voluntarily if the company employs fewer than ten full-time employees and all shareholders have given their consent (opting out). opting-out).

A limited audit focuses on the plausibility of the annual financial statements and is less extensive than an ordinary audit. It is carried out by smaller auditing companies or independent trustees.

Practical tipStart-ups with fewer than ten full-time employees can opt out of an audit. This saves costs and effort.

Options for keeping the accounts

Nowadays, start-ups have various options for organizing their accounting. From traditional methods to specialized accounting software to outsourcing to external service providers - each option offers advantages and disadvantages.

Self-accounting with software

With modern accounting software, start-ups can manage their finances efficiently and cost-effectively. These tools offer intuitive user interfaces and automate many processes, such as invoicing, VAT settlements and annual financial statements.

Advantages:

• Simple operation
• Automated booking of transactions and VAT reporting
• Cloud-based tools, always accessible from anywhere

Disadvantages:

• Sometimes a little expensive for small start-ups
• Depending on requirements, not all needs can be covered by a single tool

Outsourcing of accounting

Some startups decide to outsource all of their bookkeeping to an external service provider (trustee or accounting firm). This can be a sensible option if you want to focus on growing your business instead of spending time on bookkeeping.

Advantages:

• Saves time and avoids errors
• Legal certainty through expert knowledge
• Helpful for tax returns and annual financial statements

Disadvantages:

• Higher costs compared to internal accounting
• Less control over the ongoing financial overview

Manual accounting

For very small businesses or in the start-up phase, you can do the bookkeeping manually, either using Excel spreadsheets or simple accounting software without a lot of automation. This is the cheapest option, but also the most time-consuming and error-prone.

Practical tipFor start-ups that are growing and have more complex finances to manage, accounting software or outsourcing is often the better long-term solution.

Comparison of accounting solutions

Here you will find a comparison of the most popular accounting solutions for Swiss companies.

Conclusion: Accounting as the key to corporate control

Bookkeeping is not only a legal requirement, but also an important foundation for the success of your start-up. It helps you to keep an eye on your finances, take advantage of tax benefits and fulfill your legal obligations. Depending on the size and shape of your company and your resources, you can opt for accounting software, outsourcing or manual bookkeeping. Also remember to check early on whether an audit is required for your company to avoid any unpleasant surprises.