Why accounting is not optional
In Switzerland a sole proprietorship (Einzelunternehmen) has no legal personality separate from its owner: profits and losses flow into the personal tax return. However, this does not mean accounting is optional: even below the CHF 500,000 turnover threshold, orderly documentation is required to calculate taxable income, justify deductions and respond to FTA or cantonal audits.
Neglected accounting leads to concrete consequences: official tax assessments with unfavourable estimates, missed VAT input tax recovery, AVS contributions calculated on incorrect income, difficulty obtaining bank credit and delays in filing tax returns. For many self-employed people, cleaning up years of backlog costs more time and money than keeping accounts in order from the start.
This guide is your complete reference: which obligations apply, which accounting regime to choose, how to organise records and documents, how to link VAT and AVS, and how to close the year without stress. For specific topics, you will find links to dedicated guides on simplified accounting, VAT, tax filing and more.
Legal obligations: what the Code of Obligations requires
Swiss CO (Art. 957 ff.) clearly defines when and how a sole proprietorship must keep accounts. Here are the essentials:
CHF 500,000 threshold: simplified vs ordinary
With annual turnover below CHF 500,000 you may keep simplified accounts (income-expenditure register + statement of affairs). Above this threshold, double-entry bookkeeping with a full balance sheet applies from the following financial year.
Commercial register above CHF 100,000
Turnover above CHF 100,000 requires registration in the Commercial Register, but does not automatically change the accounting regime while you remain below CHF 500,000. Registration makes company data public.
10-year document retention
Issued and received invoices, bank statements, accounting records, VAT returns and supporting documents must be kept for 10 years (Art. 958f CO). Digital format is permitted if readable and immutable.
No mandatory statutory audit
Sole proprietorships are not subject to ordinary or limited audit under the CO. They must nevertheless maintain truthful accounts and respond to tax authority requests.
Warning: even below CHF 500,000 the tax authority may require a breakdown of income and expenditure in an audit. A «shoebox of receipts» without a chronological register is not compliant accounting.
Simplified accounting vs double-entry
The choice of accounting regime depends on turnover and business complexity. Here is a direct comparison:
| Criterion | Simplified | Double-entry |
|---|---|---|
| Turnover threshold | Below CHF 500,000 | From CHF 500,000 (following year) |
| Method | Income − expenditure + inventory | Balance sheet, income statement |
| Complexity | Low — suitable for freelancers and micro-businesses | High — requires skills or a fiduciary |
| Typical costs | Software CHF 20–50/month or Excel + time | Fiduciary CHF 150–400/month or advanced software |
For simplified accounting in detail (income-expenditure method, minimum chart of accounts, year-end closing), see the dedicated guide on simplified accounting for sole proprietorships. →
Chart of accounts and essential entries
Even with simplified accounting, organising movements in clear categories simplifies tax filing and audits. Here are the minimum recommended categories:
Revenue from services
All invoices issued for services or sales. Separate by business line if you have more than one. Record receipts on bank credit date, not only invoice date.
Material and goods costs
Purchases necessary for the business: raw materials, goods for resale, software licences, hosting, consumables. Keep supplier invoice and proof of payment.
Personnel and social security costs
Employee salaries (if any), social contributions, accident insurance, pension fund. For the owner: AVS/AI/IPG contributions on net profit as self-employed — record as professional expenditure.
General operating expenses
Office rent or home-office share, utilities, phone, internet, professional insurance, marketing, training, car expenses (documented professional share), travel, bank fees.
Depreciation and investments
Durable assets over CHF 1,000 (computers, vehicles, furniture) must be depreciated per FTA rates (e.g. IT 50%, vehicles 40%). Record purchase and annual depreciation separately — do not expense the full amount in one year.
In a sole proprietorship personal withdrawals (private account) are not business costs: record them as a transfer from business to private assets without affecting operating profit.
Documents, invoicing and archiving
Every accounting entry must be linked to supporting documentation. For Swiss sole proprietorships the same invoicing rules apply as for SMEs:
Compliant invoice and QR-invoice
The invoice must include: supplier and customer details, date, service description, amount, VAT rate (if registered), FTA UID. Since 2020 the QR-invoice is the standard for payments in Switzerland.
Sequential numbering
Assign a unique sequential number to each invoice (e.g. 2026-001, 2026-002). Gaps or duplicates raise questions in audits. Accounting software handles numbering automatically.
Supporting documents for every payment
Every professional payment requires proof: supplier invoice, receipt, card statement, bank transfer. For mixed expenses (car, phone) document the professional share applied.
Compliant digital archiving
Digital documents are valid if complete, readable and retained for 10 years. OCR and Swiss cloud simplify compliance compared to paper folders.
Link entry ↔ document
In an audit you must trace every line in the register to the original document in seconds. Software like AccountEX automatically attaches the PDF to the entry.
Foreign invoices and multi-currency
For foreign clients or suppliers, keep the original invoice and proof of exchange rate used. Record in CHF at the transaction-day rate or monthly ECB average.
For full requirements of a Swiss invoice (mandatory data, B2B/B2C differences, retention), see also the Swiss invoicing guide. →
VAT and social security contributions
Accounting, VAT and AVS are linked: errors in one affect the others. Here is what to monitor:
VAT: CHF 100,000 threshold
Above CHF 100,000 annual turnover you are mandatorily VAT-registered. Below the threshold you may register voluntarily to recover input tax. Keep separate records: tax due, input tax, quarterly return.
Effective method or flat-rate method
The effective method is standard (declare actual VAT on invoices and purchases). The flat-rate method is simplified for certain sectors (flat percentage on turnover). Choose at FTA registration.
AVS: contributions on net profit
As self-employed, AVS/AI/IPG contributions are calculated on net income from gainful activity (revenue − professional costs). Rate up to ~10% on income. Accurate accounting avoids assessments and instalments.
Consistency accounting ↔ tax return
Accounting profit must match income declared in the self-employment supplement. Discrepancies between the income-expenditure register and the return attract cantonal audits.
Register for VAT before exceeding CHF 100,000, not months later. The FTA may require retroactive VAT on sales already made without tax on invoices.
Daily workflow
Good accounting takes a few minutes a day, not a weekend in February. Here is the recommended flow:
Separate personal and business finances
Use a dedicated bank account for the business. Every private movement on the business account complicates reconciliation and increases tax adjustment risk.
Collect supporting documents in real time
Photograph receipts with OCR, import PDF invoices, link bank statements. Do not accumulate documents: backlog is the main cause of year-end errors and stress.
Record income and expenditure within 24 hours
Enter every movement with date, category, amount and document reference. With digital software, confirm the AI-suggested categorisation.
Weekly bank reconciliation
Compare bank balance with total recorded movements. Unexplained items indicate omissions or amount errors. Automatic bank connection (CAMT) makes this instant.
Monthly VAT check (if registered)
Verify that tax due and input tax are recorded correctly. Avoid surprises on the quarterly FTA return and simplify annual VAT closing.
With AccountEX: OCR scanning, AI categorisation, bank connection and income-expenditure reports ready for your fiduciary — under 10 minutes a day for most freelancers.
Year-end closing and tax return
At financial year-end (usually 31 December) consolidate figures for the tax return and any VAT returns:
Calculate operating result
Total income minus total professional expenditure = profit or loss. This amount flows into the personal return as self-employment income (self-employed supplement).
Prepare statement of affairs
List business assets at residual value: computers, vehicles, equipment, furniture. Apply annual depreciation per permitted tax rates.
Verify VAT returns
Compare VAT totals declared in quarters with accounting records. Prepare annual reconciliation if required by your method.
Prepare the tax file
Complete register, inventory, numbered supporting documents, bank statements, VAT returns, AVS summary. Keep everything for 10 years. Hand to fiduciary or import into eTax for direct filing.
With digital software, closing can automatically generate income-expenditure summary, inventory and VAT reports — ready for fiduciary or filing.
Digital tools: beyond Excel and paper
Many sole proprietorships start with Excel and a box of receipts. It works while volumes stay low — then the cost of time and errors exceeds professional software:
Limits of Excel and paper
Transcription errors (5–10%), no audit trail, slow document search, 2–3 day year-end closing, risk of lost documents. Hidden cost: 5–10 hours/month at professional hourly rate.
What modern accounting software offers
Invoice OCR, automatic categorisation, bank connection, invoice numbering, VAT management, filing reports, 10-year cloud archiving, real-time fiduciary access.
AccountEX for sole proprietorships
Built for Swiss freelancers and SMEs: simplified and double-entry accounting, QR-invoice, quarterly VAT, CAMT bank integration, self-employed supplement for filing. Setup in one day, guided Excel migration.
When to involve a fiduciary
Recommended if you exceed CHF 500,000, have employees, international activity or limited tax knowledge. Software reduces fiduciary work (and fees) while keeping records always up to date.
Even with a fiduciary, you remain responsible for documentation. Orderly software cuts preparation time and reduces costly omissions.
Practical tips for accounting without surprises
- Keep a separate bank account from day one — even if not legally required, it is the single habit that most simplifies accounting
- Do not wait until February: 10 minutes a day beats a weekend of backlog before filing
- Monitor cumulative turnover: approaching CHF 100,000 (VAT) and CHF 500,000 (double-entry) should be planned in advance
- Depreciate assets over CHF 1,000 — expensing a full MacBook in one year is a frequent tax error
- Document mixed shares (car, home office, phone) with a consistent criterion and keep the calculation — the FTA may request it
- Align accounting, VAT returns and income tax return: three figures that must tell the same story
- Use AccountEX to automate entries, VAT and annual reports — from receipt to tax return, without Excel
Related guides
Explore specific topics for your sole proprietorship:
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