Simple bookkeeping – is it right for your sole proprietorship?
You're starting out as a freelancer or self-employed person in Switzerland and wondering whether you really need elaborate bookkeeping? The good news: for most sole proprietorships, simple bookkeeping is perfectly sufficient – at least at the start. Here you'll find out when it fits and when you need to watch out.
What is simple bookkeeping?
Simple bookkeeping – also called income and expenditure accounting or, affectionately in Swiss German, the “Milchbüchleinrechnung” (“milk-book accounting”) – is the lean form of bookkeeping under Swiss law. The principle is simple:
At the end of the year, you set all income against all expenses – done. No balance sheet, no double-entry bookkeeping, no T-accounts. The legal basis is Art. 957 para. 2 CO (Swiss Code of Obligations).
Am I even eligible?
Simple bookkeeping isn't for everyone. You must meet both conditions:
You have a sole proprietorship
Limited companies (GmbH and AG) must always keep double-entry books – regardless of turnover.
Annual turnover under 500'000 CHF
What counts is gross turnover – not profit. Above this threshold, double-entry bookkeeping becomes mandatory.
General partnerships (e.g. two people without a GmbH) may also use simple bookkeeping, as long as turnover stays below 500'000 CHF.
What exactly do you need to record?
The law requires three things (Art. 957 para. 2 CO):
Income journal
All payments received, listed chronologically – date, amount, description. In many cases your bank statement is a sufficient basis.
Receipts for income: Every income entry needs proof – e.g. the invoice you issued (outgoing invoice), a payment confirmation or a bank statement entry. Without a receipt, the tax authorities won't recognise the entry.
Expense journal
All paid invoices and expenses – also in chronological order.
Receipts for expenses: Every entry needs an original receipt – supplier invoice, receipt, till slip or credit card slip. Digital receipts (e.g. PDF invoices by email) are legally equivalent, as long as they are legible and stored in full. All receipts must be kept for 10 years (Art. 958f CO).
Financial position
A periodic record of your assets and liabilities. For most freelancers this simply means: account balance + open invoices + any debts.
Rule of thumb: No entry without a receipt – no receipt without an entry. If you capture and file receipts digitally from the start, you'll save yourself a lot of searching at the end of the year.
And what about VAT?
The form of bookkeeping (simple vs. double-entry) and VAT liability are two separate topics – the VAT threshold is lower:
Turnover under 100'000 CHF
You invoice without VAT. No VAT returns to file with the FTA (Swiss Federal Tax Administration). Voluntary registration is possible (e.g. to reclaim input tax).
Turnover 100'000 – 500'000 CHF
You must register with the FTA and show VAT (8.1%) on your invoices – but you can use the simplified net tax rate method.
Expect to reach the 100'000 CHF threshold soon? Register voluntarily early on – that way you can reclaim input tax on your business expenses from day one.
When is simple bookkeeping no longer enough?
Simple bookkeeping has clear limits. Watch out for these warning signs:
Turnover approaching 500'000 CHF
If you exceed the threshold, you must switch to double-entry bookkeeping from the next financial year. Prepare in good time.
You're planning a bank loan
For loan applications, banks usually require a full balance sheet and income statement. A list of income and expenses isn't enough here.
Significant assets or debts
Vehicles, machinery, stock or loans should be properly recorded as assets or liabilities – which simple bookkeeping can only do to a limited extent.
You want sound business planning
Without managing accounts payable and receivable, you lack an overview of outstanding payments and liquidity – and with it a solid basis for decisions.
Do it yourself or hire a professional?
The beauty of simple bookkeeping: you get to choose.
Do it yourself
Option 1
- No specialist knowledge needed
- Low costs (app or Excel)
- Full overview at all times
- You put in the time
Let a professional handle it
Option 2
- Error-free thanks to an expert
- Often cheaper than with double-entry bookkeeping
- Tax optimisation included
- Cost: approx. CHF 800–1'500 / year
Conclusion
For getting started with a sole proprietorship in Switzerland, simple bookkeeping is perfectly sufficient in most cases. It's legally permitted, quick to learn and keeps the admin to a minimum.
Still, plan ahead: if your turnover grows, you need a loan or you want to set up a GmbH, sooner or later you'll have to switch to double-entry bookkeeping. So start in a structured way from the beginning – then the switch won't come as a shock.
Your simple bookkeeping – digital and stress-free
TaxEinfach is built exactly for you: sole proprietorship, Switzerland, simple bookkeeping. Record income, upload receipts, export your year-end closing – done.
Legal basis
- Art. 957 para. 2 CO – bookkeeping obligation for sole proprietorships
- Art. 931 CO – commercial register entry required from CHF 100'000 turnover
- Art. 958f CO – retention obligation (10 years)
- Art. 10 VAT Act (MWSTG) – VAT liability from CHF 100'000 worldwide turnover