When operations stop, but the company stays alive
Summer restaurants, tradespeople between jobs, shops in the low season: many Swiss SMEs plan periods when they do not provide services to the public, while remaining registered in the Commercial Register and maintaining employment contracts, premises and insurance. This is a temporary operational closure, distinct from permanent cessation of business and corporate liquidation.
The most common approach is collective holidays (Betriebsferien): the employer sets a common vacation period for staff (Art. 329c CO), usually under the employment contract, internal regulations or a collective labour agreement (CLA). During that break revenue often drops to zero or falls sharply, while rent, leasing, insurance premiums and much of payroll continue to generate cash outflows and accounting entries.
This guide outlines the organisational choices and typical accounting entries for a Swiss SME planning a temporary suspension, with reference to usual accounting principles (Code of Obligations, Swiss GAAP FER recommendations) and federal tax and social security obligations. It does not replace case-by-case legal or cantonal tax advice.
Types of operational break compared
Before setting up accounting for the period, it pays to define precisely what you are doing: the impact on wages, OASI/IV/EO/OP contributions and communications to customers and suppliers varies considerably.
| Approach | Effect on employees | Typical revenue | Accounting notes |
|---|---|---|---|
| Collective holidays (Betriebsferien) | Paid leave; use of vacation days or compensation per contract/CLA | Often none; possible residual receipts (online, fees) | Payroll and social charges in the accrual period; no suspension of contributions for lack of work |
| Reduced hours / minimum shifts | Proportional pay or supplement by agreement; watch sector minimum wages (CLA) or cantonal minima where applicable | Reduced but not zero | More realistic split of fixed/variable costs; useful for margin by cost centre |
| End of fixed-term contracts | Natural expiry or written extension; no collective holidays on already ended relationships | Variable | Accrued vacation and 13th salary to close on exit; possible severance |
| Full closure to the public (back office active) | Reduced team in admin, warehouse or maintenance | Possible invoices for work in progress or fees | Seasonal closure costs (inventory, maintenance) often capitalisable if they increase future utility |
| Permanent cessation (out of scope) | Dismissals, notice periods, severance pay | Asset liquidation | Liquidation balance sheet, elimination of items; do not confuse with temporary break |
Planning: calendar, liquidity and internal documentation
A well-documented temporary closure avoids year-end adjustments and disputes with internal audit or your fiduciary.
Resolution and traceability. For companies limited by shares, a written decision by the competent body (general meeting or management) stating dates, economic rationale and collective holiday arrangements creates an auditable trail. Keep employee communications with advance notice compliant with the contract, regulations or CLA and allowing reasonable vacation planning (Art. 329c CO); in practice and per SECO guidance, as a rule at least three months, except exceptional urgency linked to business needs.
Cash budget. Project month by month: gross wages, employer share OASI/IV/EO, ALV/AC, OP, rent, leasing, insurance, baseline energy, interest and mortgage instalments. Compare with expected receipts (fees, customer deposits, VAT refund if in credit). The break period is often when liquidity reserves built in peak season are consumed.
Commercial communication. Signage, website and voicemail are not balance sheet items, but absent turnover must be consistent with any subscriptions or maintenance contracts billed: check deferred revenue already in the accounts.
Fixed costs during the break: what keeps weighing on the business
Under accrual accounting, lack of sales does not automatically suspend expenses. Here are the most relevant categories for an SME in a planned break:
Property and leasing
Rent, ancillary charges and equipment leasing remain period expenses unless negotiated clauses apply (temporary reduction, authorised subletting). Booking follows the contract: capitalised instalments vs real estate leasing instalments per your accounting policy.
Any landlord discounts should be recorded as cost reduction in the reference period, not shifted to reopening without justification.
Staff and social charges
During paid collective holidays, salary and social contributions (OASI, IV, EO, ALV, AC, OP) continue on the normal payroll cycle. Costs are charged to payroll accounts and liabilities to pension institutions.
If part of the team is on agreed unpaid leave, salary stops but watch OP rules and employment continuity for any insurance entitlements.
Insurance and subscriptions
Professional liability, fire, vehicle comprehensive, software licences and connectivity: check which contracts can be suspended or reduced and from which date, to avoid double payments or coverage gaps when you reopen.
Premiums already paid for periods beyond closure may require prepaid expense accruals to amortise month by month.
Energy, maintenance and inventory
Reduced consumption does not eliminate baseline cost. Idle inventory may trigger write-downs (spoilage, obsolescence) to recognise at period end under the prudence principle.
Extraordinary maintenance that extends useful life of an asset may be capitalised if it meets capitalisation criteria; otherwise it stays in the income statement for the break period.
Accounting entries: accrual period and partial closing
Ordinary Swiss accounting requires financial position and results to be presented truthfully and clearly (Art. 958 CO). During a temporary closure there are no special rules that «freeze» costs: supplier invoices, salaries and depreciation continue to be recorded by accrual date.
Revenue and costs without correlation. A negative operating margin in the Betriebsferien month or quarter is normal. For internal analysis, many SMEs use a «Seasonal closure» cost account or dedicated cost centre to aggregate fixed expenses for the period, without changing the legal classification of items (payroll, rent, depreciation).
Accruals and deferrals. Expenses paid in advance (annual insurance, annual software fee) must be adjusted at month-end or year-end. Revenue for services to be delivered after reopening remains a liability (deferred revenue) until performance.
Depreciation. Temporarily unused fixed assets generally continue to depreciate, unless an impairment review applies if recoverable amount falls durably — rare for a short seasonal break.
VAT. If you perform no taxable supplies, the regular periodic return may show a credit (purchases exceeding sales). Check refund or carry-forward of credit and correct handling of any imports or foreign purchases during the break. Mere absence of invoicing does not exempt you from filing obligations if you are registered.
Profit tax. Accounting losses in the break period feed into the annual result; for companies limited by shares, loss carryforwards follow federal and cantonal rules. Document that the company has not ceased trading, useful also in dialogue with cantonal tax authorities.
Staff: collective holidays, salary certificate and contribution continuity
Payroll accounting during the break must stay aligned with payslips and year-end salary certificates.
During paid collective holidays (Art. 329d CO), days count as vacation taken in the HR system; this is not unemployment or unjustified absence. Pay and contributions are recorded as in other months (account 5xx / social liabilities). If the CLA provides a supplement for collective holidays outside the tourist season, treat it as a separate wage item but subject to contributions like ordinary salary.
Plan in autumn for the impact on the annual salary certificate (Lohnausweis): unused vacation and compensations must be consistent across the vacation register, accounts and Lohnausweis. Common errors include double-counting closure days or failing to book contractually due allowances during Betriebsferien.
For managing directors with an employment or paid mandate contract, the logic is similar: remuneration due in the break period remains a cost of the period, unless formally agreed temporary reductions in writing.
Practical management in digital accounting
Accounting software such as Accountex helps visually separate the break period without duplicating entries:
- Use accounting periods or analytical tags to filter the closure month and compare it with the same month of the prior year.
- Set due-date reminders for insurance accruals, VAT returns and OP payments not suspended during the break.
- Reconcile bank accounts even when movements are few: bank fees and direct debits continue.
- Attach digital documents — resolutions, employee emails and landlord agreements — to link each adjustment to its reason.
- Before reopening, run an inventory check and record any value adjustments on a single clear accrual date.
Checklist before, during and after the break
| Phase | Key actions |
|---|---|
| Before | Resolve dates; check employment contracts and CLA; cash budget; inform customers and suppliers; assess suspensions of insurance/software contracts |
| During | Record costs by accrual; maintain payroll and contribution cycle; reconcile bank; monitor receivables and payables due dates |
| After reopening | Adjust inventory; reactivate policies and subscriptions; verify deferred revenue; close break-period accruals; seasonal comparison for next year's budget |
Common mistakes to avoid
Treating the break as cessation. Do not remove entries from the Commercial Register or close tax accounts unless there is a real liquidation. A temporary break does not justify stopping bookkeeping.
Suspending payroll «to save money». During collective holidays salary is due; shifting costs to the next period distorts results and violates the accrual principle.
Forgetting accruals and prepaid premiums. Profit or loss for the closure month alone looks distorted if annual insurance is fully expensed at payment.
Confusing with unemployment or short-time work. Paid collective holidays fall within the employment relationship (vacation pay, Art. 329d CO): they are not unemployment benefits and absence due to company holidays is as a rule not compensable as reduced hours (Kurzarbeit/short-time compensation; Art. 33 lit. c ALAC). When in doubt, consult a labour law adviser.
In summary
Temporary closure of a Swiss SME is above all an exercise in workforce and liquidity planning, recorded in accounts like any other period: fixed costs and wages continue to drive results while revenue may be absent entirely. Correctly classifying collective holidays, documenting decisions and using accruals, cost centres and digital attachments keeps the balance sheet, VAT returns and salary certificates consistent until reopening.
Integrate the break into the multi-year budget: many seasonal businesses fund Betriebsferien with accruals from strong months, an accounting practice that reflects prudent liquidity management in line with Swiss rules.