Why month-end cut-off is not just “accounting close”
In a Swiss SME, management reports — margin by job, monthly EBITDA, burn rate — almost always rely on accrual data, not cash movements. If at month-end you omit a supplier invoice dated the 3rd of the following month, or forget to accrue an annual subscription, the P&L for the month is distorted: decisions on pricing, bonuses or hiring are based on wrong numbers.
The matching principle (Art. 958b CO: chronological and material distinction, together with the Swiss accounting standards applicable to your entity) requires costs and revenue to be allocated to the period in which the obligation or right arises, regardless of payment. Accruals and deferrals are the typical tools to comply without waiting for every physical document.
The aim of this guide is a monthly cut-off that is accurate enough for management, doable in a few hours and integrable into the workflow of accounting software such as Accountex, without turning every month-end into a mini year-end close.
Accruals, deferrals and cut-off: what it means in practice
Confusing the terms is the most common cause of later adjustments. Here is an operational map:
Accrued expenses (costs)
Costs already incurred in the month but not yet invoiced or recorded — estimated energy, salaries to be trued up, ongoing consulting, interest, provisions for employee benefits or social obligations (e.g. occupational pension/LPP), where relevant. Recorded as a debit to an expense account and a credit to accrued expenses.
Accrued revenue
Revenue earned in the month but not invoiced — usage-based services, proportional fees, work in progress on fixed-fee contracts. Useful to align billed revenue with work performed, especially in services and project business.
Prepaid expenses (deferred charges)
Payments made for future periods — insurance, software licences, rent paid in advance. The cost is allocated over the matching months by amortising the prepaid balance.
Deferred revenue
Cash received before performance — customer deposits, prepaid subscriptions, annual maintenance invoiced upfront. Revenue is recognised over time by releasing deferred revenue.
The cut-off is the point (usually the last business or calendar day of the month) by which you “freeze” matching and period balances: no postings with an accounting date in the closed month after that point, except documented exceptions.
Monthly cut-off checklist for SMEs
Adapt the items to your chart of accounts and your revenue/expense cycle. The order follows a flow that does not block reports: operations first, then matching adjustments, finally the freeze.
| Step | Action | Expected output |
|---|---|---|
| 1 | Bank and corporate card reconciliation to month-end balance | No unexplained “pending” items |
| 2 | Scan supplier invoices with document date ≤ last day of month (even if the PDF arrives later) | Complete month costs for recurring suppliers |
| 3 | Check issued sales invoices and drafts to issue (WIP / to be invoiced) | Revenue aligned with services delivered |
| 4 | Accrued expenses from templates (rent, operating lease, SaaS, telecom, legal fees) | Reversal entries planned for the following month |
| 5 | Amortisation of prepaid expenses (policies, licences, prepaid rent) | Monthly portion to expense, prepaid balance consistent |
| 6 | Revenue recognition from deferred revenue (subscriptions, deposits) | Month revenue ≠ cash receipts only |
| 7 | Payroll: gross matching, estimated social contributions if payslips not final | Stable monthly personnel cost for the CFO |
| 8 | VAT check: taxable base from invoices + relevant matching adjustments | Period VAT base defensible in an audit |
| 9 | Close accounting period in software and lock dates (formal cut-off) | Management reports “frozen” with a known version |
Swiss VAT and cut-off: aligning matching and tax period
For entities subject to value added tax (VAT Act, LTVA/LIVA), the internal monthly cut-off does not replace the rules of the effective accounting method or flat-rate schemes (or lump-sum methods), but it must prevent margin reports (net or gross VAT, depending on company convention) from diverging from the quarterly or semi-annual return to the Federal Tax Administration (FTA/AFC).
In general, tax liability on taxable supplies arises when the supply is performed; input tax deduction and reporting periods (as a rule calendar quarter with the effective method, half-year with flat rates, unless other methods are permitted by the FTA) follow VAT law. Internally, record VAT with an accounting date aligned to the invoice or matching adjustment and clearly mark estimates (accruals) to adjust when the final document arrives. That way the VAT payable/receivable account reflects the management period, not only the inbox the following week.
For purchases from foreign suppliers (B2B services, marketplaces), ensure reverse charge and month-end adjustments are included in the VAT step of the checklist, especially if you use clearing accounts.
“Light” close: materiality and reports without paralysis
Not every line needs the same precision. Separating what moves the margin from what is negligible avoids delaying the monthly actuals:
| Level | Typical SME examples | Recommended approach |
|---|---|---|
| High priority | Payroll, rent, project COGS/materials, recurring revenue | Mandatory accruals; no management report before step completed |
| Medium priority | Marketing, consulting, maintenance, interest | Templates + CHF threshold (e.g. under 500: monthly batch) |
| Low priority | Petty cash, rounding, one-offs | Record in payment month if immaterial |
Document the materiality threshold in an internal note (audit, board or accounting policy). In case of a statutory audit or a move to stricter accounting standards (e.g. Swiss GAAP FER), you can raise the level of detail without changing cut-off logic.
Recurring templates and team roles
Efficient cut-off repeats: same accounts, same estimated amounts updated quarterly, same reversal entries on the first business day of the new month. In Accountex (or any structured accounting system), create posting templates for known accrued expenses and leave only amount verification to the admin lead.
Split responsibilities: who reconciles the bank, who checks commercial WIP, who approves accruals above threshold. The finance lead publishes the management report only after checklist step 9, with a “pre-document adjustments” note if supplier invoices are still pending — transparency that avoids budget disputes.
For multi-canton or multi-unit setups, close operating entities first and group adjustments last (management fees, allocations), so branches are not waiting on informal consolidation.
Common mistakes and how to avoid them
- Double counting after the invoice arrives: every accrual must have a reversal counterpart or explicit link to the final document.
- Confusing payment date and matching date in exports to BI or Excel — always use the accounting or matching date field.
- Unamortised deferrals on cancelled contracts: at month-end check that active contracts match deferral balances.
- Endless WIP: without partial billing policy, accrued revenue inflates the balance sheet; set criteria (approved hours, milestones).
- No period close: without date lock, cut-off is theory only; a late posting undoes the work.
In summary
An effective month-end cut-off for a Swiss SME balances matching accuracy and reporting speed: targeted accruals and deferrals, a short repeatable checklist, clear materiality thresholds and formal period close in accounting software.
Investing two or three hours each month in this rhythm reduces year-end surprises, makes the VAT position defensible and gives management numbers to base pricing, investment and hiring on — without duplicating work you will already do at year-end.