A small self-employed business does not always need the same accounting setup as an LLC. But “simplified bookkeeping” does not mean there are no rules. Before choosing a spreadsheet or software, check what your legal structure and turnover require.
Key points
- Simplified bookkeeping tracks receipts, expenses and the business’s assets and liabilities.
- It is available in particular to sole proprietorships and partnerships with turnover below CHF 500,000 in the previous financial year; the full regime applies from that amount.
- A limited company (SA/AG) or LLC (Sàrl/GmbH) must keep full accounts, even with low sales.
- VAT has its own rules: eligibility for simplified bookkeeping does not automatically exempt you from VAT.
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What does simplified bookkeeping include?
It records money received and expenses clearly, with supporting documents. It also records assets and liabilities: cash, receivables, inventory, equipment and debts.
A receipts and expenses spreadsheet can provide a starting point. It must let you identify the supporting document, date, amount and nature of each transaction. Keep separate records of assets and liabilities if the spreadsheet does not cover them.
For example, a CHF 400 customer payment appears in receipts. A paid CHF 80 business purchase appears in expenses, with its receipt. At year end, you must still know which customers owe you money and which invoices remain to be paid.
Simplified bookkeeping is more than an annual cash surplus
Fictional example: the business receives CHF 40,000 and pays CHF 25,000 during the year. The net cash movement is CHF 15,000. With an opening bank balance of CHF 5,000 and no other flows, the closing bank balance is CHF 20,000. At that date, customers also owe CHF 5,000 and the business owes suppliers CHF 2,000. Assuming no other assets or liabilities, net assets are 20,000 + 5,000 − 2,000 = CHF 23,000. The CHF 15,000 net cash movement and CHF 23,000 net assets measure different things. Taxable profit must be determined under the applicable rules, with any necessary adjustments.
Choosing a regime is not the same as choosing paper or software
Simplified bookkeeping can be done in software; double-entry accounts can be poorly organised despite sophisticated software. The regime determines the records and financial statements required. The tool helps you do the work.
Consider two businesses with CHF 120,000 in turnover: a sole proprietorship and an LLC. Subject to their specific circumstances, the first may qualify for simplified bookkeeping, while the second must keep full accounts. The same sales volume does not mean the same obligations.
A business eligible for simplified bookkeeping may still want more detailed information on receivables, inventory or profitability. The legal minimum and management needs are not always identical. A more complete setup should remain proportionate to its usefulness.
How does double-entry bookkeeping work?
Each transaction affects at least two accounts, with total debits equal to total credits. This structure supports the preparation of a balance sheet and income statement.
A CHF 1,000 customer invoice, in an example without VAT, increases receivables and revenue. When the customer pays, the amount moves from receivables to the bank: that second entry does not create new revenue.
Double entry therefore separates the sale from its payment. Our explanation of debits and credits covers the logic without expecting you to memorise every entry at the outset.
Accounting obligations for the self-employed in Switzerland
In this French-language video, Sarah and Romain explain the accounting obligations of a sole proprietorship. The guide then provides the regime comparison, examples and separate VAT rules.
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Who can use simplified bookkeeping?
For a sole proprietorship or partnership, the test is turnover generated in the previous financial year. Article 957 of the Code of Obligations (CO) distinguishes the following situations:
| Previous financial year’s turnover | Accounting regime |
|---|---|
| Below CHF 500,000 | Records of receipts, expenses, assets and liabilities are permitted; double entry remains an option. |
| CHF 500,000 or more | Full accounting records and financial reporting are compulsory. |
The threshold includes exactly CHF 500,000. A sole proprietorship reaching that amount in its previous financial year must prepare to use the full regime for the new year.
Limited companies and LLCs must keep full accounts regardless of turnover. Some associations and foundations have specific rules; their regime cannot be determined from size alone.
There is a separate concession for very small businesses: subject to the conditions and CHF 100,000 limit in Article 958b(2) CO, income and expenses may follow cash receipts and payments. This does not exempt an LLC from preparing a balance sheet, income statement and notes.
Headcount or the existence of inventory does not replace these legal criteria. However, these factors can make double entry more useful in practice.
The differences at a glance
| Point of comparison | Simplified bookkeeping | Double-entry bookkeeping |
|---|---|---|
| Businesses considered here | Sole proprietorships and partnerships below CHF 500,000 turnover in the previous financial year. | Limited companies and LLCs; sole proprietorships and partnerships reaching the threshold; voluntary adoption is also possible. |
| What to record | Receipts, expenses, assets and liabilities, with supporting documents. | Each transaction in the relevant accounts, followed by a balance sheet and income statement; notes according to the legal structure and obligations. |
| An unpaid customer invoice | Track it in the receivables list: no cash has yet been received. | Under accrual accounting, it appears in receivables and the relevant period’s sales. |
| Pitfall to avoid | Confusing bank movements with business profit. | Assuming software makes entries correct without review. |
Three questions to decide: what is your legal structure? What turnover did you generate in the last financial year? Do you need closer tracking of inventory, outstanding invoices or financing? The first two set the legal framework; the third helps you choose a useful setup.
Why choose double entry before it becomes compulsory?
It makes it easier to track receivables and liabilities, compare financial years and discuss financing with a bank. It becomes useful when payment terms, investments or inventory become significant.
It requires greater discipline and knowledge of accounting treatment. Software can simplify entry, but unusual transactions still need to be understood and balances checked.
For a small sole proprietorship, compare administration time, management information needs and the cost of support. The lightest solution today may not be the one that makes tomorrow’s growth easier.
Bookkeeping and VAT are separate questions
The general VAT registration threshold is CHF 100,000 in worldwide turnover from supplies not excluded from the tax, subject to special rules. It differs from the CHF 500,000 accounting threshold: a business can use simplified bookkeeping while being liable for VAT. The Federal Tax Administration explains the VAT liability conditions.
Choosing between the effective and net tax rate methods, or between reporting on agreed consideration and consideration received, involves separate decisions. Reporting VAT on consideration received requires the relevant FTA authorisation.
Make sure your records provide the information needed for VAT returns. A poorly configured bank-transaction list may not be enough.
What your receipts and expenses records should explain
For each movement, retain at least the information needed to identify its date, nature, amount and supporting document. Separate business trading from owner contributions, drawings and financing. Money received is not always trading revenue; money paid out is not always a deductible expense.
If you transfer CHF 5,000 from your personal account to the business account, the bank balance rises but you have not made CHF 5,000 of sales. If the business later repays CHF 2,000 of loan principal, it reduces a debt: the amount does not become an operating expense simply because it leaves the bank.
Tracking assets and liabilities completes the picture. Unpaid customer invoices, outstanding debts, stock and equipment must remain identifiable under the applicable requirements. A list of bank movements does not tell the whole story.
When switching to double entry, prepare a documented opening statement. Review invoices already accounted for under the previous regime to avoid counting income or an expense twice when payment occurs. Agreeing the method with your accountant before the transition makes the first close easier.
Not every bank receipt is a sale
| Movement | Amount | How to interpret it |
|---|---|---|
| A customer pays for a service | CHF 1,000 | Cash received from a sale, to match against the invoice. |
| You transfer savings into the business account | CHF 2,000 | An owner contribution to identify separately: it is not revenue. |
| The bank advances a loan | CHF 10,000 | Financing received and a debt to track: it is not revenue. |
The bank balance rises by CHF 13,000, but only CHF 1,000 comes from customers here. Apply the same distinction to payments: personal drawings are not business expenses.
Prepare for a change of method
Also list your fixed assets and their depreciation: carrying amounts do not necessarily equal the prices originally paid.
List assets and liabilities at the transition date. Check outstanding invoices, stock, fixed assets, loans, owner contributions and drawings.
Choose an appropriate chart of accounts and transfer opening balances with proper checks. Avoid recording income or expenses twice when moving from payment-based records to accrual accounting.
Subject to the legal requirements, records can be kept in the currency most important to the business; every entry does not have to be in Swiss francs. Financial statements and tax returns nevertheless have their own requirements.
Example: preparing a useful opening balance sheet
A sole proprietorship switches to double entry on 1 January. Its supporting records show the following amounts, with no other items in this example:
| Assets | CHF | Liabilities and equity | CHF |
|---|---|---|---|
| Bank | 18,000 | Trade payables | 9,000 |
| Trade receivables | 12,000 | Loan | 10,000 |
| Inventory | 8,000 | Owner’s equity | 26,000 |
| Equipment, opening carrying amount | 7,000 | ||
| Total | 45,000 | Total | 45,000 |
Owner’s equity of CHF 26,000 is the difference between CHF 45,000 of assets and CHF 19,000 of liabilities. It is neither an amount to deposit in a blocked account nor revenue on the first day.
Support every item with evidence: a bank statement, unpaid customer invoices, an inventory count, an equipment schedule and loan agreements. Also check how the CHF 12,000 of customer invoices was treated for tax before the transition. Payments after 1 January clear the opening receivables; transition adjustments prevent income from being omitted or taxed twice.
Balanced opening figures can still be wrong if a debt is missing or unsaleable stock is overstated. The essential work is supporting the amounts, not merely producing two matching totals.
Choose a method suited to your obligations and needs
The right system complies with your regime while letting you find documents, understand balances and prepare for deadlines. Simplicity comes mainly from a consistent routine.
Are you self-employed? Our accounting support for the self-employed helps you choose a suitable setup and prepare for fuller accounts when the business needs them.
Frequently asked questions
Can an LLC with CHF 20,000 in sales use simplified bookkeeping?
Low turnover does not qualify it for that regime: its legal structure requires full accounts.
Is using an Excel file prohibited?
Not in principle. However, you must ensure the required information is reliable, traceable, retained and readable.
Do you have to change methods when you hire someone?
Hiring creates payroll and social insurance obligations. It does not replace the legal accounting criteria, but may justify a more structured setup.
Sources and references
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 taxation.
