What is simplified accounting
Simplified accounting — known in German as Einnahmen-Ausgaben-Rechnung — is the bookkeeping method available to sole proprietorships and partnerships with annual revenue below CHF 500,000 (Art. 957 para. 2 CO). Instead of maintaining a full balance sheet with assets and liabilities, it is sufficient to record income and expenses, along with a statement of assets at year-end.
This method is simpler than double-entry bookkeeping, but it doesn't mean you can improvise. The Federal Tax Administration (FTA) and cantonal authorities still require orderly documentation, supporting receipts for every transaction, and compliance with VAT deadlines — if the business is VAT-registered. Errors in simplified accounting can lead to discretionary tax assessments with estimated amounts that work against the taxpayer.
The good news is that today's digital tools make simplified accounting not only compliant, but also fast. Instead of piling up receipts in a shoebox and transcribing everything into Excel at year-end, you can record income and expenses in real time, with OCR reading invoices and automatic categorisation. The result: less time, fewer errors, no year-end surprises.
Who qualifies for simplified accounting
The Swiss Code of Obligations precisely defines who must use full accounting (double-entry) and who can use simplified accounting. Here are the key criteria:
Revenue threshold: CHF 500,000 (Art. 957 para. 2 CO)
Sole proprietorships and partnerships with annual revenue below CHF 500,000 may keep simplified accounting based on income and expenses. This threshold refers to gross revenue, not net profit.
Eligible legal forms
Only sole proprietorships (Einzelunternehmen) and partnerships (general and limited partnerships) may use the simplified regime. Corporations (AG) and limited liability companies (GmbH) must always use double-entry accounting, regardless of revenue.
Commercial register obligation
Sole proprietors with revenue exceeding CHF 100,000 must register with the Commercial Register, but they can still use simplified accounting as long as they remain below CHF 500,000. Registration does not automatically require double-entry bookkeeping.
VAT registration
If a sole proprietorship reaches CHF 100,000 in revenue, it becomes subject to mandatory VAT registration. This does not change the right to simplified accounting, but it requires separate VAT records (output tax, input tax, quarterly or semi-annual returns).
Warning: if revenue exceeds CHF 500,000 during a financial year, the obligation to switch to double-entry bookkeeping starts from the following year. It is essential to monitor revenue trends, especially when approaching the threshold.
The income-expense method (Einnahmen-Ausgaben-Rechnung)
The core of simplified accounting is the income and expense ledger. Every receipt and every payment is recorded chronologically, with the date, description, amount, and reference to the supporting document. Here is a practical example for a freelance graphic designer:
| Type | Description | Amount CHF |
|---|---|---|
| Income | Invoice no. 2026-031 — Logo design for client Müller | + 2,400.00 |
| Income | Invoice no. 2026-032 — Website for client Rossi SA | + 5,800.00 |
| Expense | Adobe Creative Cloud licence (annual) | – 720.00 |
| Expense | Coworking space rent — April 2026 | – 450.00 |
| Expense | AHV/IV/EO contributions — Q1 2026 | – 1,850.00 |
| Expense | Laptop purchase for professional use | – 1,299.00 |
The operating result is calculated as the difference between total income and total expenses. An inventory of business assets (business net worth) at year-end is also required for the tax return.
Minimal chart of accounts
Even with simplified accounting, it pays to organise income and expenses into clear categories. A minimal chart of accounts makes the tax return easier and protects you during an audit:
Service income (revenue)
All invoices issued for services or products sold. Separate by activity type if you have more than one (e.g. consulting vs. training). Includes ancillary income such as expense reimbursements billed to the client.
Material and goods costs
Purchases of raw materials, goods for resale, and consumables needed for the business. For a designer: software licences, prints, hosting. For a tradesperson: materials, tools, spare parts.
Personnel costs (if applicable)
If you have employees: gross salaries, social contributions (AHV/IV/EO/ALV), accident insurance (UVG), occupational pension (BVG). Even as a solo operator, your personal AHV contributions as a self-employed person belong here.
General and operating expenses
Office rent or home-office share, electricity, telephone, internet, professional insurance, accounting/fiduciary fees, training, advertising, car expenses (business share), postage.
Depreciation and investments
Durable assets worth more than CHF 1,000 must be depreciated over time (e.g. computer: 50% per year, furniture: 25% per year). Record the initial purchase and annual depreciation separately.
Daily bookkeeping workflow
Well-managed simplified accounting takes just a few minutes a day, if you follow a structured approach. Here is the ideal workflow:
Collect receipts immediately
Every time you make a payment or receive money, save the receipt. If you use a digital app, snap a photo with your phone and let OCR extract the data. If you use paper, put the receipt in today's folder. Don't accumulate backlogs — they are the enemy of orderly bookkeeping.
Record income and expenses the same day
Enter every transaction into your income-expense ledger by the end of the day. With digital software, you simply confirm the AI-suggested categorisation. In Excel, enter date, description, category, and amount. The goal is never to be more than 24 hours behind.
Verify bank balances weekly
Every week, compare your bank account balance with the running total of income minus expenses in your ledger. If the numbers don't match, there's an unrecorded or incorrectly recorded transaction. With automatic bank feeds, this check is instant.
File receipts in an orderly manner
Every receipt must be traceable to its corresponding entry. Use sequential numbering (2026-001, 2026-002…) or let the software assign a reference automatically. Receipts must be kept for 10 years.
Check VAT monthly (if registered)
If you are VAT-registered, verify monthly that output tax (on invoices issued) and input tax (on purchases) are recorded correctly. This prevents surprises when your quarterly return is due.
Simplified year-end closing
At year-end, even with simplified accounting you need to prepare documentation for the tax return. Here are the essential steps:
Calculate the operating result
Add up all income for the year and subtract all expenses. The result is your operating profit (or loss). This amount goes into your personal income tax return as self-employment income.
Prepare the asset inventory
List all business assets with their residual value: vehicles, equipment, computers, office furniture. Calculate the year's depreciation using the tax-approved rates (FTA: 40% for vehicles, 50% for IT equipment, 25% for furniture).
Prepare the VAT summary (if applicable)
If you are VAT-registered, verify that the total output tax and input tax declared in your quarterly returns match the totals in your ledger. Prepare the annual VAT reconciliation statement.
Archive the complete documentation
The tax file must contain: complete income-expense ledger, asset inventory, numbered receipts, bank statements, VAT returns. Keep everything for at least 10 years from the close of the financial year (Art. 958f CO).
Tip: if you use digital software, the year-end closing can be generated automatically. AccountEX produces the income-expense summary, asset inventory, and VAT reports with a single click — ready for your fiduciary or for direct filing.
Digital vs. paper: why switch
Many self-employed professionals still manage their accounting with Excel and a folder of paper receipts. It works, but at what cost? Here's a direct comparison:
Recording time
Paper/Excel: 3–5 minutes per invoice (manually copying amount, date, supplier). Digital with OCR: 15 seconds (snap photo, confirm). Over 100 invoices per month, you save 4–7 hours.
Transcription errors
Paper/Excel: frequent errors on amounts, dates, categories (5–10% error rate). Digital: the software reads data directly from the original document — error rate below 1%.
Finding receipts
Paper: finding a 2024 invoice in a binder takes minutes (or hours, if the archive is messy). Digital: search by name, amount, date, or supplier in 2 seconds.
Year-end closing
Paper/Excel: 2–3 days to prepare the tax file, with risk of missing items. Digital: report generated automatically in 5 minutes, with all receipts attached.
Compliance and security
Paper: risk of loss (fire, flood, misplacement). No audit trail. Digital: automatic cloud backup, guaranteed immutability, access from any device.
True cost
Paper/Excel: apparently free, but time lost has a cost (an hourly rate of CHF 100 × 7 hours/month = CHF 700/month). Digital: CHF 20–50/month for professional software — net savings of CHF 650+ per month.
Practical tips for simplified accounting
- Always separate your personal bank account from your business account. Even though it's not mandatory for sole proprietors, it makes accounting 10 times simpler and clearer — for you and for the tax authorities.
- Record mixed-use expenses (car, phone, home office) with the correct business share. The FTA generally accepts 50% for vehicles, 40–60% for home office, and the actual share for phone. Document your allocation method.
- Don't wait until year-end to do your accounting. Even 10 minutes a day is enough to stay current. Backlogs turn a simple task into a nightmare — especially in February, when you need it for your tax return.
- Always keep original receipts (or compliant digital copies) for at least 10 years. Even a small coffee receipt from a client meeting can be requested during a tax audit.
- If you exceed CHF 100,000 in revenue, register for VAT and start recording output and input tax separately. You can choose the effective method or the flat-rate method — for most freelancers, the flat-rate method is simpler.
- Check every quarter whether your cumulative revenue is approaching CHF 500,000. If you're growing fast, start preparing for the transition to double-entry before you're required to — switching mid-year is complicated.
- Use AccountEX to automate your simplified accounting: OCR invoice scanning, AI categorisation, automatic bank feeds, and instant generation of the income-expense summary for your tax return. Less than 10 minutes a day.
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