Why every CapEx investment deserves a formal process
In a Swiss SME, a fixed-asset investment — machinery, company vehicles, IT systems, furnishings or real estate — can determine profitability for years. Unlike operating expenses (OpEx), CapEx ties up immediate liquidity and appears on the balance sheet as fixed assets, with effects on depreciation, equity and borrowing capacity.
Many companies with up to 50 employees still decide «around the table» or based on the owner's intuition. This approach works as long as amounts remain modest; it becomes risky when a single purchase exceeds 10–15% of available liquidity or when several investments accumulate in the same fiscal quarter.
A structured CapEx approval workflow — even a lean one — allows you to compare alternatives, quantify expected return and document the decision for shareholders, the bank and the auditor. This guide describes the essential stages, the numerical criteria to apply and the accounting implications under Swiss standards (FER or Swiss GAAP FER).
CapEx and OpEx: accounting classification criteria
Before starting the approval process, verify that the expenditure is actually an investment and not a current expense. The distinction follows the accrual principle and FER rules on capitalisation of investments:
| Criterion | CapEx (investment) | OpEx (current expense) |
|---|---|---|
| Useful life | More than one financial year | Consumed in the financial year or within 12 months |
| Typical SME threshold | Generally ≥ CHF 1'000–5'000 (to be defined in internal policy) | Below the company's capitalisation threshold |
| Balance sheet treatment | Fixed asset → multi-year depreciation | Expense on the income statement in the financial year |
| Liquidity impact | Immediate cash outflow, P&L cost spread over years | Cash outflow = P&L impact in the same period |
| Typical examples | CNC machining centre, server, commercial vehicle, premises refurbishment | Annual SaaS licence, routine maintenance, consumables |
| Approval required | CapEx workflow with ROI analysis and liquidity impact | Operating budget or delegation to department head |
Note: with operating leases, economic ownership remains with the lessor; the lease payment is OpEx. With finance leases or direct purchase, assess capitalisation of the asset and any financial liability.
Approval workflow: the five stages
An effective CapEx process for SMEs does not require a formal investment committee, but it must be traceable and repeatable. Here is a model suited to companies with 5–80 employees:
Request and business case
The requester (production manager, IT, administration) completes a form with: asset description, supplier and price, «do not invest» alternative, expected benefits (time savings, increased production capacity, cost reduction), desired purchase date and estimated useful life.
Financial analysis
Accounting or the CFO calculates ROI, payback period, simplified NPV (where applicable) and impact on net liquidity over 12 months. Consistency with the annual investment budget and repayment obligations to the bank or leasing company is verified.
Evaluation and decision
In a GmbH, material investments may require approval by the general meeting of shareholders depending on the articles of association and the amount (Art. 808 CO; in an AG, Art. 704 CO). Define clear thresholds: for example up to CHF 25'000 delegated to management, above CHF 25'000 decision by the general meeting of shareholders.
Execution and recording
After approval, issue the purchase order, record the invoice as investment in progress or fixed asset, apply the correct VAT rate (8.1% standard rate; watch for partial recovery if the activity is exempt), and plan accounting and tax depreciation.
Post-investment review
6–12 months after commissioning, compare actual vs. expected benefits. Document variances: this feeds future estimates and demonstrates governance to the auditor and creditors.
ROI, payback and eligibility criteria
Swiss SMEs can use simple but rigorous metrics. A complex DCF model is not needed for every purchase; what matters are comparable figures across competing projects for the same limited liquidity.
Simple ROI
Formula: (Annual net benefit − Annual additional costs) ÷ Initial investment × 100.
Example: machine costing CHF 80'000 generating net savings of CHF 24'000/year (reduced labour and scrap) → ROI = 30%. Compare it with the cost of capital (current bank interest + internal risk premium, often 6–10% for SMEs).
Payback period
Investment ÷ annual net cash flow = years to recover the initial outlay.
In the example above: 80'000 ÷ 24'000 ≈ 3.3 years. Many SMEs set a maximum payback of 3–5 years for machinery and 2–3 years for IT, unless regulatory or contractual constraints require faster investment.
Recommended decision thresholds
- Green: ROI above cost of capital and payback within company threshold → standard approval.
- Amber: Positive ROI but payback at the limit → assess liquidity impact and leasing vs. purchase options.
- Red: Negative ROI or payback beyond accounting useful life → reject or defer until new conditions (price, cantonal incentives, succession).
Liquidity control: the constraint that really decides
An investment with excellent ROI can be unacceptable if it depletes cash before the next seasonal receipt or breaches bank covenants. Liquidity control must be integrated into the workflow, not added afterwards.
Before each CapEx approval, update a rolling 13-week (or at least quarterly) cash projection that includes: opening balance, expected receipts from open invoices and confirmed orders, supplier payments, salaries and social contributions (OASI, pension fund, accident insurance), instalment tax payments, loan and lease instalments, and the proposed CapEx outflow.
| Indicator | Formula / reference | SME guideline threshold |
|---|---|---|
| Residual liquidity post-investment | Cash + liquid assets − CapEx − imminent payments (30 days) | Maintain ≥ 1.5–2 months of fixed costs |
| CapEx / annual revenue | Total annual investments ÷ net revenue | Sector-dependent; often 3–8% in services, 8–15% in manufacturing |
| Self-financing | Operating cash flow − dividends − CapEx | Positive or covered by dedicated financing |
| Current ratio post-investment | Current assets ÷ short-term liabilities | ≥ 1.2 to reassure bank and suppliers |
If liquidity is insufficient, consider alternatives: finance lease (lower initial cash impact), instalment purchase with payment at 30/60/90 days, deferring the investment to the next quarter, or public grants (cantonal programmes for energy efficiency and digitalisation, Innosuisse calls for innovation projects — check active calls in your canton).
Accounting and Swiss tax treatment
Accounting entries (FER)
On purchase: debit fixed asset account (machinery, furniture, vehicles, IT systems) and credit bank/supplier. Capitalisable ancillary costs: transport, installation, commissioning.
In subsequent financial years: depreciation charge to the income statement according to a company plan consistent with economic useful life. Maintain an asset register with acquisition date, value, rate and responsible person.
Tax depreciation
At federal level, the FTA publishes maximum rates in Circular A/1995; cantons generally adopt them. Depreciation must be «commercially justified» and must not exceed these limits. Many SMEs use guideline rates (declining balance on residual book value): furniture and machinery 25–30%, vehicles up to 40%, IT systems up to 40%, commercial property (buildings only) 4–8% depending on type.
Accelerated or extraordinary depreciation requires justification (obsolescence, damage). Document the CapEx approval decision: the auditor and the cantonal tax authority may request a record.
Governance, documentation and audit
Under the Code of Obligations, managers (GmbH) or the board of directors (AG) must administer company assets with due care (Art. 812 and 717 CO). Material undocumented investments expose the company to challenges from minority shareholders, creditors or in insolvency proceedings.
Document archive checklist
- CapEx request form with department head signature
- Quotes from at least two suppliers (except for justified emergencies)
- ROI and payback calculation with explicit assumptions
- Liquidity projection updated at the time of decision
- Minutes or approval email with date and competent authority
- Invoice, payment instruction and asset register entry in accounting
- Post-investment report at 12 months with variances
SMEs subject to ordinary or limited audit benefit from an orderly investment file: it reduces annual closing time and facilitates dialogue with the bank for new credit lines linked to CapEx.
How Accountex supports the CapEx cycle
Centralising requests, budgets and accounting entries in a single platform reduces classification errors and speeds up monthly closings. With Accountex you can link each investment to the supplier and the correct asset account, monitor depreciation over time and cross-reference CapEx outflows with liquidity in real time.
Set an annual investment budget by category (machinery, IT, vehicles) and compare it with actual spend: when a request exceeds the remaining balance, the system flags the variance before the order is placed. This keeps the approval workflow aligned with balance sheet figures, not just business case slides.