Why customer-specific moulds require dedicated accounting treatment
In make-to-order production — plastics, moulding, machining, electronics, or assembly — it is common to manufacture moulds, assembly fixtures, masks, or inspection devices designed for a single customer or product family. The cost of these assets can range from a few thousand to hundreds of thousands of francs and directly affects margins, liquidity, and profit or loss.
In Switzerland, accounting follows the Code of Obligations (CO) and, for most SMEs, Swiss GAAP FER. Choosing incorrectly between capitalisation, cost of goods sold, or a separate invoicing line item can distort the balance sheet, trigger audit disputes, or leave costs unrecoverable when the commercial relationship ends.
This guide outlines the most common models for depreciating, invoicing, and recovering the costs of customer-specific moulds, with practical references to the Swiss tax context and the needs of manufacturing SMEs using Accountex to manage jobs, fixed assets, and margins.
Types of tooling and classification criteria
Before defining depreciation and invoicing, clarify the economic nature of the asset and who bears the risk of use:
| Asset type | Typical lifespan | Usual ownership | Common accounting treatment |
|---|---|---|---|
| Injection or moulding mould or die | 50,000–500,000 cycles or 2–5 years | Manufacturer or customer, per contract | Fixed asset with accelerated depreciation, or job cost |
| Assembly fixture or SMT stencil | 1–3 years / per production batch | Often the manufacturer | Cost of goods sold allocated per unit, or one-off charge |
| Dedicated inspection or calibration device | Aligned with product lifecycle | Variable | Tooling fixed asset or quality cost |
| Special tools and inserts | Short (hundreds of hours) | Manufacturer | Consumables or small fixed assets |
| Tooling reusable across multiple customers | 5–10 years | Manufacturer | Standard fixed asset, no direct charge to customer |
The decisive criterion is not purchase value alone, but reusability: a mould made exclusively for one customer item and destined for scrapping at job completion has a different economic profile from tooling partially adaptable to other orders. Always document the decision in an internal memo or in the supply contract.
Four cost recovery models compared
Swiss manufacturing SMEs typically adopt one of the following commercial and accounting approaches:
1. One-off charge to the customer
The mould cost is invoiced separately — often on order or on delivery of the first batch — with a dedicated line item (e.g. "Tooling / NRE"). The manufacturer does not capitalise the asset if ownership passes immediately to the customer, or records it only temporarily until transfer.
Advantage: immediate liquidity recovery. Note: clearly define transfer of ownership, maintenance, and insurance in the contract.
2. Allocation across units produced
The tooling cost is included in the unit price until the agreed investment is covered (e.g. CHF 0.80/unit for 10,000 units). Accounting-wise, deferred revenue (liability for deferred revenue) may be recorded until the recovery plan is completed.
Advantage: lower entry barrier for the customer. Risk: if orders decline, recovery takes longer and must be monitored per job.
3. Capitalisation and internal depreciation
The mould remains on the manufacturer's balance sheet and is depreciated in the income statement. The unit price incorporates an implicit contribution towards tooling cost. No separate invoice line item.
Advantage: greater commercial flexibility. Disadvantage: the balance sheet exposes a risk if the customer abandons the programme before break-even.
4. Deposit or rental of tooling
The customer pays a refundable deposit or a periodic fee for use of mould owned by the manufacturer. The deposit is not revenue until retained for damage or breach of conditions.
Useful when ownership remains with the manufacturer but the customer finances the initial investment. Requires rigorous tracking in accounting and tooling inventory.
Book and tax depreciation in Switzerland
Under the CO (Art. 960a), assets must be recorded at acquisition or internal production cost and depreciated in accordance with generally accepted commercial principles, based on economic useful life. Swiss GAAP FER provide distinct categories for plant, machinery, and equipment; moulds and dies typically fall under technical equipment with a shorter useful life than main machinery.
In the absence of a binding contractual term, many manufacturing SMEs apply indicative schedules as follows — to be adapted to the specific case and company policy:
| Category | Indicative useful life | Method | Practical note |
|---|---|---|---|
| Customer-dedicated moulds | 2–4 years or job duration | Straight-line or per unit produced | Depreciation per unit if volume is contractually guaranteed |
| Reusable tooling | 5–8 years | Straight-line | Review residual value at end of life |
| Special tools and inserts | 1–2 years or direct expensing | Straight-line or consumption basis | Internally defined capitalisation threshold (e.g. CHF 1,000) |
| Obsolescence write-down | Ad hoc | Impairment adjustment | Required if the customer cancels the product programme |
For income tax purposes, book depreciation is deductible within the limits permitted for tax (Art. 62 LIFD), provided it is economically justified. In the event of an exceptional write-down due to loss of the customer, document management's decision and the lack of future use of the tooling. For material amounts, align with your tax adviser or fiduciary before year-end close.
Invoicing, VAT, and transfer of ownership
Invoicing customer-specific moulds and tooling has direct implications for VAT (VAT Act, standard rate currently 8.1% from 2024). The general rule: if you transfer a tangible asset to the customer with transfer of ownership, the supply is subject to VAT in Switzerland, except in particular cases for exports or deliveries abroad.
Essential operational distinction:
- Sale of the mould:Issue an invoice with a separate line item (e.g. "Mould tooling XYZ"), VAT on the supply, update the fixed asset register if the asset was capitalised internally.
- Cost recovery integrated in unit price:No separate line item; VAT applies to the overall unit price of the production supply.
- Refundable deposit:Does not constitute revenue until retained; amounts paid as a deposit are as a rule excluded from the VAT base (Art. 21 VAT Act) — verify the treatment in the specific case with your fiduciary.
- Engineering services (NRE):If you invoice engineering and design only without transfer of the physical asset, treat as a service supply under standard VAT rules.
Cross-border delivery: If the mould is shipped directly to a foreign customer or used exclusively for export production, assess with your fiduciary whether the conditions for a direct export exempt under Art. 23 VAT Act are met. Customs documentation and the contract must be consistent with the chosen VAT treatment.
Practical accounting: from quote to balance sheet
An orderly accounting workflow reduces closing errors and facilitates job-level analysis:
- Quote and order: Quote tooling, production, and mould maintenance separately. Explicitly state ownership, guaranteed duration, and programme cancellation terms.
- Order to mould supplier: Record the invoice to work-in-progress fixed assets (tooling under construction) or directly to fixed assets if delivery is immediate. Link the document to the cost centre / customer job.
- Commissioning: Transfer from "under construction" to "technical equipment" and activate the depreciation schedule. If recovery is per unit, set up a deferred revenue account or a temporary allocation account.
- Production: For each batch, calculate manufacturing cost including tooling depreciation share or release deferred revenue in proportion to units invoiced.
- Job close-out: Review the remaining tooling balance. If the recovery plan is incomplete, assess a final charge, impairment, or reuse on other projects.
Simplified numerical example
A plastic components manufacturer in Ticino purchases a mould for CHF 40,000 dedicated to Customer A, with a recovery plan over 20,000 units (CHF 2.00/unit). The mould remains owned by the manufacturer.
On purchase: accounts payable / credit tooling fixed assets CHF 40,000. Straight-line book depreciation over 4 years: CHF 10,000/year. Commercial recovery of CHF 2.00/unit is tracked analytically per job up to CHF 40,000.
After 12,000 units (CHF 24,000 recovered), Customer A cancels the programme. The manufacturer impairs the unrecoverable balance (CHF 16,000 less estimated residual value) and records the loss in the income statement, documenting the event for audit and income tax purposes.
Contract clauses that protect margin
A well-drafted supply contract avoids accounting and tax disputes. Include at least the following clauses:
Title and risk
Specify whether the mould is owned by the manufacturer or customer, who bears repairs, modifications, and insurance, and where it is physically stored.
Recovery plan and minimum order
Minimum guaranteed quantity, unit price including tooling share, penalties for early cancellation or charge for remaining unamortised cost.
Mould modifications and revisions
Distinction between customer-funded modifications (change order) and ordinary wear. Each revision with update to book value and, if necessary, the depreciation schedule.
End of relationship and fate of tooling
Buyout, return, certified destruction, or internal reuse options. Define the transfer price if the customer purchases the mould at job completion.
Managing moulds and tooling with Accountex
Accountex enables Swiss manufacturing SMEs to link purchases, fixed assets, jobs, and invoicing in a single workflow. For customer-specific moulds, job-level traceability is what makes the difference between a clear margin and a balance sheet with "hidden" costs.
In practice, you can record mould purchases allocated to the customer cost centre, activate automatic depreciation on the equipment category, issue invoices with a separate line item or a unit price including allocation, and monitor in the dashboard the balance between tooling cost, cumulative depreciation, and amounts already invoiced to the customer. At year-end, job reports facilitate verification of incomplete recoveries and impairment decisions.
Rely on your fiduciary to validate VAT and tax treatment; Accountex ensures your data is organised, documented, and ready for closing — without parallel spreadsheets for every mould in production.
Year-end closing checklist
| Check | Action |
|---|---|
| Physical tooling inventory | Reconcile fixed asset register with moulds actually in warehouse or at customer sites |
| Open recovery plans | List jobs with tooling balance not yet covered and assess impairments |
| Contract / invoice consistency | Verify that ownership and invoice line items match the contract and VAT treatment |
| Depreciation | Review useful lives and any accelerated depreciation for completed jobs |
| Audit documentation | Archive contracts, supplier orders, recovery plans, and impairment decisions |