When you work for yourself, business income and the money available for daily living can seem interchangeable. Accounting helps separate them: what the business earns, what it owes and what you withdraw personally.
Key points
- A sole proprietorship belongs to one person; a general partnership (SNC/Kollektivgesellschaft) has several partners. Neither is an SA/AG or an LLC.
- Below CHF 500,000 of revenue in the previous financial year, records of receipts, expenditure and assets and liabilities are permitted. From CHF 500,000 inclusive, full commercial accounting is required.
- A sole proprietor’s personal drawings are not an employee salary deductible from the business’s profit.
- Reserve cash separately for tax and social insurance contributions.
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What accounting records must you keep?
In French-speaking Switzerland, “carnet du lait” is an informal name for simplified records of receipts, expenditure and financial position. It is not a legal term. Our small business accounting guide explains the broader Swiss accounting framework.
For your sole proprietorship or general partnership, look at revenue in the last completed financial year. Below CHF 500,000, simplified records are permitted. At CHF 500,000 or more, full commercial accounting becomes compulsory.
Example: a general partnership with a 31 December year-end earns exactly CHF 500,000 of revenue in 2025. It must keep full accounts for 2026. To prepare, it identifies its bank balances, customer receivables, inventory, equipment and liabilities at 1 January 2026 and establishes supported opening balances. It should not wait to cross the threshold again during the new year.
“Simplified” does not mean the bank balance is enough. Record receipts and expenditure, but also track assets and liabilities: cash, receivables, stock, equipment and debts. Keep supporting documents so transactions can be checked.
Double-entry accounting may be worthwhile before it becomes compulsory, especially with many unpaid invoices, inventory or a need for a balance sheet to obtain funding.
Starting your first year? If forecasts clearly show revenue exceeding CHF 500,000, using double-entry accounting from the outset avoids reconstructing balances and records the following year. This is an organisational recommendation, separate from the statutory test based on the previous year.
The business bank account does not show your entire income
As a sole proprietor, you can transfer money to your private bank account for living costs. That reduces business cash, but does not turn the withdrawal into a deductible salary. Business profit is calculated from professional income and expenses under the applicable rules.
The reverse also happens: you personally pay a business expense. It should not disappear from the accounts because it bypassed the business bank account. Retain the receipt and identify the payment so it can be recorded correctly against the owner’s or relevant partner’s account.
This is why an owner’s private account in the ledger is useful. It distinguishes what the business produces from what you contribute or withdraw. A general partnership needs that record for each partner.
Separate business activity from private spending
A dedicated business bank account makes transactions easier to follow. Avoid mixing household purchases and holidays with customer receipts. For mixed-use expenditure, identify and document the business share instead of deducting the whole amount.
The owner’s private account in the ledger is different from a personal bank account. It records matters such as the owner’s contributions and drawings. You can therefore have both a business bank account and a private account in your chart of accounts.
Deductible business expenses must be justified by the activity. Paying a private bill from the business account does not make it a business expense.
Paying yourself: drawings or salary?
A sole proprietor may withdraw CHF 2,000 a month for living costs. The annual CHF 24,000 represents private drawings, not a salary that automatically reduces business profit.
Consider a business recording CHF 150,000 of income and CHF 60,000 of professional expenses. Its profit is CHF 90,000, subject to any necessary adjustments. If the owner withdraws CHF 20,000, profit does not fall to CHF 70,000: cash and the owner’s private account change instead.
This assumes expenses have been correctly identified. The treatment of the self-employed person’s own social contributions must be consistent between the accounts and tax return. Do not deduct them twice.
In a general partnership, the accounts and partners’ agreement should distinguish contributions, withdrawals and each partner’s share of the result. It is not necessarily a matter of dividing the bank balance equally.
Example: profit allocation in a general partnership
Two partners agree to allocate 60% of profits to A and 40% to B. The partnership earns CHF 90,000. Before other contributions, adjustments and personal social contributions and taxes:
| Calculation | Partner A | Partner B |
|---|---|---|
| Share of profit | CHF 90,000 × 60% = CHF 54,000 | CHF 90,000 × 40% = CHF 36,000 |
| Drawings already taken | − CHF 20,000 | − CHF 15,000 |
| Net movement from these transactions | CHF 34,000 | CHF 21,000 |
The CHF 34,000 and CHF 21,000 are not necessarily available in the bank. Profit may still be tied up in unpaid customer invoices or inventory. Drawings do not alter partnership profit; they change individual partners’ accounts and cash.
The 60/40 split assumes an agreement between the partners. Unless agreed otherwise, profits and losses are divided equally regardless of the nature of contributions, under Articles 533 and 557 CO. Record your agreement in writing to avoid disputes, and ensure personal social contributions are not deducted twice.
The owner’s private account: contributions, drawings and personally paid expenses
The private account is an accounting ledger account. It tracks movements between the business and its owner: money introduced, personal withdrawals and business expenses paid from the owner’s pocket. It is not the owner’s personal bank statement. Its balance is generally transferred to the owner’s capital account at year-end.
The following sole-proprietor double-entry examples exclude VAT and other effects. Account names are simplified; numbering depends on the chart used.
| Transaction | Debit | Credit | Effect on profit |
|---|---|---|---|
| Owner transfers CHF 5,000 from a personal account | Bank CHF 5,000 | Owner’s private account CHF 5,000 | None: it is not a sale |
| Owner withdraws CHF 1,200 for personal spending | Owner’s private account CHF 1,200 | Bank CHF 1,200 | None: it is not salary |
| Owner personally pays a CHF 600 business invoice | Business expense CHF 600 | Owner’s private account CHF 600 | Profit falls by CHF 600 if the expense is allowable |
The third situation is often overlooked. A payment outside the business bank account does not erase a business expense. Conversely, paying for household groceries from that account does not make them deductible.
In a general partnership, allocate each movement to the correct partner immediately. A personal payment by A should not be credited to B or divided arbitrarily. Individual records make it easier to compare contributions, allocated profits and drawings.
At year-end, ask for an explanation of the reconciliation between accounting profit and declared income. Tax adjustments and personal contributions may appear in different places depending on the organisation used. The key check is simple: each amount should be recognised once, with identifiable support.
Use the Swiss chart of accounts to see where these entries fit within your business accounts.
Plan for tax and social insurance bills
A sole proprietorship’s profit is taxed in the owner’s hands. A general partnership’s income and wealth are allocated to its partners under the applicable rules. This differs from an LLC paying corporate income tax and then distributing a dividend.
The final bill depends on other income, deductions and canton, among other factors. One flat percentage for every self-employed person across Geneva, Vaud, Valais, Fribourg, Neuchâtel, Jura or Bern would be misleading. Estimate instalments for your circumstances and adjust them when profit changes significantly.
In 2026, self-employed old-age and survivors’ insurance, disability insurance and income compensation contributions (AHV/IV/EO in German; AVS/AI/APG in French) are 10% from CHF 60,500 of relevant annual income. A sliding scale applies from CHF 10,100 to below CHF 60,500; below that, the minimum contribution is generally CHF 530 a year. Particular rules apply, including to secondary activities. Family allowance contributions and administration fees may be added. The 10% is neither the total social insurance cost nor a percentage to apply to revenue: the compensation office assesses the relevant business income.
Allow separately for social security contributions and taxes when deciding how much cash you can withdraw.
VAT and accounting are separate questions
A small business can use simplified accounting and still be liable for VAT. VAT thresholds and rules differ from commercial accounting requirements.
If registered, organise evidence, input tax records and returns according to the authorised VAT method you use. Do not choose a VAT treatment simply because you keep a receipts-and-payments spreadsheet. Our Swiss VAT guide explains the starting points.
Work out how much you can withdraw safely
Annual profit alone is not a drawings budget. Some may be tied up in receivables or inventory, while tax and social contribution bills are still to come.
Consider this illustrative cash example. The bank balance is CHF 30,000. Upcoming business commitments total CHF 12,000. You reserve CHF 8,000 for future tax and social contributions based on an estimate suited to your circumstances. The remaining CHF 10,000 is available for drawings only after considering other business needs and the cash buffer you want to retain.
The CHF 8,000 is not a universal rate. The estimate depends on profit, instalments already paid and your personal position. Update it as the activity changes instead of waiting for an adjustment bill.
In a partnership, also agree how often to review drawings and partners’ accounts. The agreed profit split may be respected on paper while cash advances create substantial differences between partners if they are not monitored.
A simple routine for useful accounting records
- Gather documents: sales and purchase invoices, receipts and bank statements, with references that let you retrieve them.
- Explain each movement: sale, business expense, contribution or private drawing. Money paid in by the owner is not revenue.
- Reconcile your records to the bank: identify missing or duplicate transactions and business expenses paid personally.
- Look ahead: unpaid customer invoices, suppliers, VAT, tax and social contributions. Use that view to adjust the amount you can withdraw.
At year-end, complete the records with assets and liabilities, inventory and the supporting documents for the tax return. Even simplified accounting must explain the business’s financial position.
A cash-flow budget helps distinguish money you can take out from money needed for suppliers, VAT or tax instalments. It is often more useful than a quick glance at the bank balance.
Our free invoicing software lets you prepare invoices and follow up outstanding balances. Keep the supporting documents with your accounting records.
Watch the video
Accounting obligations for a Swiss sole proprietor
This French-language video explains accounting for a Swiss sole proprietorship. The guide adds worked examples of owner contributions, drawings and partners’ individual accounts.
Explore the Entreprendre en Suisse avec Sarah et Romain channel →
Keep business needs separate from your personal budget
Well-maintained accounts help you understand what the business earns and how much you can take out without compromising upcoming payments. Tracking contributions, drawings and deadlines makes the distinction practical.
Our accounting service for the self-employed can help organise your records and accounts around your business. If you are comparing legal forms, see general partnership or LLC in Switzerland.
Frequently asked questions
Can I keep my own sole proprietorship accounts?
Yes, if you have the knowledge and organisation needed. Periodic review by an accountant can help with areas you know less well.
Should I issue myself a payslip?
A sole proprietor’s own drawings are not an employee salary. Any employees you hire have a different position.
Does a general partnership limit the partners’ liability?
No. A Swiss general partnership involves partners’ personal liability under the statutory conditions. That difference from an LLC matters when choosing a legal form, independently of the accounting method.
What is the difference between a business bank account and an owner’s private ledger account?
A dedicated bank account receives and pays business transactions. The owner’s private ledger account records contributions, withdrawals and business expenses paid personally. A separate bank account helps with record-keeping, but its balance is neither profit nor the amount freely available for drawings.
Sources and references
- Code of Obligations, Article 957: accounting obligations — English.
- Code of Obligations: profit-sharing rules, Articles 533 and 557 — English.
- OASI/DI information centre: self-employed contributions, 2026 — English.
- Federal Social Insurance Office: 2026 contribution amounts — French.
- SECO: full accounting from CHF 500,000 in the previous year — German.
Romain Prieur is a Swiss Certified Public Accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and business advisory in Switzerland, he advises entrepreneurs on company formation, accounting and tax.
