Sole proprietorship accounting in Switzerland (2026): simplified log or double entry?

Simplified or double-entry bookkeeping: what is the difference, and which one does the law require?

The Code draws one line, at CHF 500,000 of turnover: below it either format is permitted, from it double entry is mandatory (Art. 957 CO). Below the line, para. 2 asks only for accounts of income, expenditure and the financial position, with the principles of orderly accounting applied by analogy (para. 3). Everything else about the choice comes down to what each format can report when December arrives.

The simplified format (Milchbüchleinrechnung, comptabilité simplifiée) is a dated log with three parts, money in, money out and a December note of assets and debts, every row tied to a receipt. It has no memory of the previous year and no built-in place for what the owner takes out or puts in, even though the tax form will ask for those figures, so they end up on a side list. Its one result is receipts minus payments; your taxable profit is that figure adjusted for assets, depreciation and private shares, worked out on the side.

How it looks in practice: a spreadsheet, a notebook or a lightweight app. A client pays, you add a row with the date, amount and invoice number. You buy a train ticket, you add a row and file the ticket. In December you write down the bank balance, the invoices nobody has paid yet, the laptop you bought in March and the supplier bills you still owe, and that page plus the log is your year.

The double-entry format writes each transaction into two accounts at once, one for the source of the money and one for its destination, so the accounts always balance. A client's payment is more cash and more revenue; a laptop is less cash and a new asset. At the close the accounts produce two statements, one for the year's earning and spending and one for what is owned, owed and left over as the owner's stake. A separate owner's account holds private withdrawals and contributions.

In practice: you work in bookkeeping software. Every bank line and every receipt is assigned to an account, most of them by the program. Unpaid invoices wait in a receivables account until the money lands. The laptop sits in an asset account and sheds a fixed slice of its value each year. Transfers to your private account go to your owner's account. On 31 December you export two statements rather than writing one page.

The two turnover lines (2026)

A register entry at the lower threshold (Art. 931 CO) says nothing about which format you may keep; the two rules sit in different articles. Whichever format you use, every record and receipt stays on file for ten years (Art. 958f CO), on paper or scanned under the Business Records Ordinance (GeBüV, SR 221.431); where a business is obliged to draw up annual accounts, those two statements are kept in written, signed form (Art. 958f para. 2 CO).

Is the choice declared anywhere? No. Nothing is registered, filed or dated. It surfaces once a year, when the self-employed page of most cantonal tax returns asks whether commercial accounts are kept (mit oder ohne kaufmännische Buchhaltung). Tick "with" and the two December statements go in as attachments, leaving most of the questionnaire empty; tick "without" and the questionnaire itself becomes your income statement, with assets, debts, withdrawals and contributions declared on it line by line. Ordinary expense deductions are the same in both; provisions, the Delkredere and the Warendrittel exist only in booked accounts.

Which bookkeeping method should a sole proprietor choose?

For sole proprietorship bookkeeping in Switzerland, a simplified log is enough if you expect to stay under CHF 100,000, bill for time rather than goods, own nothing worth more than a laptop and do not intend to borrow.

Outside that profile, start with double entry: the moment turnover passes CHF 100,000, or equipment, stock, a leased vehicle, a bank loan or a GmbH comes into view, each of those steps will ask for the two statements that only double-entry books can produce, and with software doing the posting the added effort is close to nil for a service business with few transactions.

That is what we advise in practice, because the requests for a balance sheet come years ahead of the legal obligation:

• The cantonal tax office wants, even from a simplified log, a declaration of assets, debts, withdrawals and contributions. That is the content of a balance sheet without its form.
• A lender asks for two or three years of statements and reads the equity line first; a log has none.
• VAT on the default basis needs the amounts invoiced but not yet paid; a log-keeper either applies for the received-consideration basis (Art. 39 VAT Act) or uses the net tax rate method, which needs no input-VAT records.
• A future GmbH needs an audited opening balance sheet lifted from the existing books.
• The CHF 500,000 line itself opens double entry on 1 January with an opening balance sheet built from whatever was kept before.

A year in the simplified format. You log each payment as it reaches the bank. In December you add up the bank balance, the open client invoices, your equipment and the bills you still owe and put them on a page; the log says receipts minus payments, and the taxable profit is worked out from it on the side. Three questions then have no clean answer: why the bank balance and the profit are different numbers; what became of last December's unpaid invoices, which never entered this year's log; and whether stock bought in December and sold in February belongs to this year or next.

The same year in double entry. Each payment is matched to an invoice, a receipt or a private transfer. Last December's invoices wait in receivables and roll forward on their own. The equipment loses its fixed slice. Your withdrawals gather in the owner's account. Once your fiduciary has booked depreciation and the close, the software prints both statements, and the gap between bank balance and profit is explained line by line.

Example. A graphic designer, a typical freelancer in Switzerland with CHF 180,000 of turnover, applies in her third year to lease a CHF 40,000 vehicle, and the leasing company asks to see balance sheets for the past two years. From double-entry books she exports two PDFs. From a simplified log the statements have to be assembled from her lists, bank statements and invoices, a job for a fiduciary that takes a few days and a fee. The lease is approved either way; what differs is the speed and the amount of outside help.

What does double entry look like for a one-person business?

Ten accounts or so, not a hundred. The standard chart of accounts in Switzerland for small businesses is the Kontenrahmen KMU; a sole proprietor works from a cut-down version of it, and three of those accounts carry most of the year: the bank, the owner's account (Privatkonto) and equity.

The owner's account is what allows a one-person balance sheet to close. A transfer to your personal account is neither an expense nor pay; it reduces your stake in the business and is booked here. Money you bring in does the reverse, raising your stake, and is booked here as well.

Worked year — the designer, year one, in CHF

What this means in practice. The bank holds 25,500 and the profit is 85,000. In a simplified log that gap is a puzzle; in these two statements it is three lines on top of the 10,000 she started the year with: 8,000 not yet collected, 1,500 still inside the laptop, 60,000 the designer lived on. In software she typed almost none of it. The program read her bank statement and her receipts and posted each to its account; the lines it put to her were the transfers to her personal account, which she confirmed as withdrawals. The two statements above are what she downloaded in January, once her fiduciary had booked the depreciation and the close.

Do I pay myself a salary, and what are my withdrawals taxed on?

No. The owner of an Einzelfirma cannot be on its payroll, so for the owner there is no wage, no payslip and no employer contribution (staff, if any, are employed normally). What the owner lives on comes out as private withdrawals, and those withdrawals are invisible to both the tax office and the compensation office. For a sole proprietorship in Switzerland, taxes and AHV are assessed on the profit the business made. Take out CHF 20,000 or CHF 100,000 in a year that closes at CHF 85,000 of profit and the two assessments are identical; the only line that moves is equity on the balance sheet.

In 2026, anyone registered as self-employed in Switzerland pays AHV/IV/EO at 10.0 % of net profit from CHF 60,500 upward. Beneath that, a sliding scale runs from CHF 10,100, opening at 5.371 %; under CHF 10,100 the minimum contribution is CHF 530; the compensation office may add an administration charge of up to 5 % (AHV/IV information sheet 2.02). Provisional instalments are based on your own estimate, and the final amount is set after the tax assessment. Pillar 3a: without a pension fund the deductible ceiling is 20 % of net earned income, at most CHF 36,288 in 2026; with a pension fund it is CHF 7,258 (BSV).

Since 2026, a year in which you paid less than the limit (2025 or later) can be made up within the following ten years (Art. 7a BVV 3). Five conditions apply:

• you had AHV-liable earned income in Switzerland both in the gap year and in the buy-in year;
• the full ordinary contribution for the current year has already been paid;
• no more than one buy-in per year;
• the buy-in is capped at the "small contribution" (CHF 7,258) per gap year, for the self-employed as well;
• no pillar 3a retirement benefits have been drawn yet.

Example, continued. The compensation office does not take the CHF 85,000 as it stands. The tax office reports that figure net of the AHV/IV/EO she deducted, so the compensation office first subtracts an allowance for interest on the equity she keeps in the business, a small amount that depends on the year's rate, and then grosses the result up to 100 % at the 10 % contribution rate (Art. 9 para. 4 AHVG; information sheet 2.09): 85,000 ÷ 0.9 gives a contribution base of roughly CHF 94,400. The CHF 9,000 she actually booked plays no part in that calculation. On that base she owes about CHF 9,440 of AHV/IV/EO and up to CHF 470 in administration. Her income tax, by contrast, is assessed on CHF 85,000 less deductions, and the CHF 60,000 she withdrew appears nowhere. Pay CHF 17,000 into pillar 3a and her taxable income falls to CHF 68,000 while her AHV base stays at about CHF 94,400, because the 3a deduction comes after AHV has been worked out. That asymmetry is, in our experience, the most frequent surprise on a first self-employed assessment.

What does VAT registration change in a sole proprietor's books?

Two new accounts, and every receipt now matters twice. VAT registration in Switzerland becomes compulsory at CHF 100,000 of worldwide turnover from supplies that are not exempt from VAT (Art. 10 VAT Act), the registration deadline is 30 days (Art. 66), and the 2026 standard rate is 8.1 % (ESTV). Below the line you may register anyway (Art. 11); owners with large supplier costs sometimes do, to recover the input VAT.

Once liable, your invoices carry the UID with the MWST suffix plus the rate and the tax amount. In the books that splits each sale in two: the net price goes to revenue, the tax to a new account for VAT owed. Each supplier receipt splits the same way: the net amount is an expense, the tax goes to a second new account for VAT recoverable. The return is the balance between those two accounts. It only works if every receipt since the liability date has been booked. Returns are filed quarterly under the effective method and half-yearly under the net tax rate method. Since 2025, a business with turnover up to CHF 5,005,000 may file one annual return instead (Art. 35 para. 1bis VAT Act), provided earlier returns and payments were on time. The ESTV still collects instalments during the year, so the timing of payments does not change. A simplified log has no VAT accounts at all, which is why owners who register from one usually spend their first VAT period booking receipts a second time.

Crossing the line without noticing. For an existing business, liability begins with the financial year after the one in which turnover passed CHF 100,000 (Art. 14 para. 3 VAT Act). For a business in its first year, the exemption ends as soon as it is foreseeable that turnover will reach CHF 100,000 within twelve months; that can be the first month of trading. Invoices issued without VAT after that point are still taxable. The 8.1 % comes out of the price already collected, and registration is backdated. When you find out, do five things: add up the trailing twelve months of invoices; register in the ESTV Portal; choose between the effective and the net tax rate method; issue VAT on the invoices still open; and retrieve every supplier receipt since the liability date so the input VAT is not lost.

What does a typical month look like with simplified bookkeeping and with double-entry bookkeeping?

Both formats begin with the same two inputs, the bank statement and the receipts, and scans of both are accepted (Art. 958f para. 3 CO and the GeBüV). Either can be kept by hand or in software; what separates them is what the records contain and how much checking the format performs by itself.

A typical month in the simplified format. You log each bank line with its date, amount, category and receipt number, in a spreadsheet, a notebook or a basic app. Transfers to your personal account have no row of their own, so they go on a side list for the tax form. Card and PayPal payments are added from their own statements. By hand or in an app, nothing at month-end confirms that your log and the bank agree, because the format has no second side to compare against. By hand, a one-person service business spends forty to sixty hours a year on this, an estimate from our practice; an app shortens the typing but not the checking.

A typical month in double entry. You use bookkeeping software built for sole proprietors, such as SoloDesk. You photograph receipts as they come in; the software reads each one, proposes an account and pairs it with the matching bank line. The lines it cannot place, mostly your private transfers and the odd payment with no receipt, come back to you as a short list to confirm. The bank balance in the software equals the balance at the bank each month, because every line has been paired against the other side. Typically a few hours a year, most of them confirming withdrawals and chasing receipts you forgot to photograph.

Year-end in each. Simplified: you write down the bank balance, the open client invoices, your equipment and your unpaid bills, subtract payments from receipts, adjust for assets, depreciation and private shares, and carry the categories into the tax questionnaire; an app can print the log, but the year-end figures are still yours to assemble. Double entry: receivables, payables and the owner's account are already in the books; your fiduciary books depreciation and the closing entries at year-end, and the software prints both statements for the return.

Sole proprietorship bookkeeping in Switzerland: one year for a VAT-registered owner with CHF 100,000–200,000 of turnover (estimates from our practice)

Which accounting app should a sole proprietor use in Switzerland?

The right accounting app for sole proprietors in Switzerland depends on the format chosen and on how much accounting the owner already knows. Most Swiss apps handle double entry; what varies is how much of the posting they take over and how much they expect the user to understand. Some are built for accountants and show a journal and a chart of accounts; others are built for owners and show documents, a bank statement and a dashboard, with the postings done underneath.

SoloDesk is a Swiss accounting app for sole proprietors and small businesses with no accounting background; it posts transactions automatically from receipts and bank lines and lets a fiduciary work in the same books. For a sole proprietor who has settled on double entry and has never kept books before, that is the case SoloDesk was designed for: the postings are made for you, and your side of the work consists of receipts, bank lines and the figures they produce. The free plan covers a sole proprietor with up to 10 documents a month and lets you share the year-end numbers with your fiduciary as PDF or Excel exports. Paid plans add payroll, higher document volumes and an invitation link that lets your fiduciary open the same books directly, so the spreadsheet exports, forwarded receipts and emailed statements that usually mark the year-end fall away.

What does accounting for a sole proprietor look like with SoloDesk?

Day 1 to 30: documents arrive. You photograph each receipt in the mobile app or forward supplier invoices by email. Document Intelligence reads the supplier, the date, the amount and the VAT, matches the supplier against your contacts and proposes the account. A software subscription lands in the IT-expense account, a train ticket in travel expenses, and a new monitor in the fixed-asset account where larger equipment belongs, as an asset rather than an expense.

Once a month: the bank. You upload the statement. Bank Reconciliation pairs each line with the invoice or receipt it belongs to. Client payments close the open invoice in receivables; supplier payments close the bill in payables. Whatever cannot be paired, a transfer to your personal account, a card payment without a receipt, a client who paid two invoices in one amount, waits in the Resolution Feed. For most sole proprietors that feed holds a handful of items a month; confirming "this was a withdrawal" is one tap, and the Privatkonto is right.

Every quarter, or once a year, if VAT-registered. The VAT return is the difference between the VAT payable and VAT receivable accounts, calculated on the effective method and ready to copy into the ESTV Portal. There is no separate VAT spreadsheet to maintain, because every receipt was booked with its VAT the day it arrived.

Every day, the dashboard. Cash in the bank, invoices outstanding, bills due, VAT owed so far and profit to date, all live, so the "bank says 25,500 but profit says 85,000" question from the worked year is answered on screen rather than discovered in April.

In December. Receivables and payables are already in place from the year's postings, and the Privatkonto balance is ready to be folded into equity. Depreciation on fixed assets and the closing entries are the work your fiduciary still does at year-end, from the same books: on a paid plan your fiduciary opens your SoloDesk account through the invitation link, on the free plan they work from your PDF or Excel exports; either way they book those entries and produce the balance sheet and income statement for the "with commercial accounts" box on the tax return.

What happens when a sole proprietorship passes CHF 500,000?

Once turnover has reached CHF 500,000, double entry applies from the following year, beginning on 1 January with an opening balance sheet. From that year on, the annual accounts, as part of the annual report, are approved and signed by the owner (Art. 958 para. 3 CO). If your books were already double entry, the change is a date. If you kept a log, the opening balance sheet has to be assembled: every unpaid invoice in both directions, every asset at its written-down value, the bank balance, and your opening equity as whatever remains.

Example — day one. In year four the designer reaches CHF 520,000. Her double-entry books close on 31 December with bank 140,000, receivables 65,000, equipment 18,000, payables 22,000 and equity 201,000. On 1 January those five lines are her opening balance sheet; nothing is rebuilt or estimated. From a simplified log the same five figures would have to be found: receivables from the invoices sent, payables from supplier emails, equipment from purchase dates and depreciation tables, equity as the number that makes the sheet balance. It is the most time-consuming job a fiduciary does for a sole proprietor, and double-entry books from the start remove it.

Many owners consider a GmbH at this point. The threshold does not require it. The real reasons to incorporate are limited liability, paying yourself a wage with pension-fund cover, and bringing in partners or investors. You can learn more about accounting for a GmbH in our article on GmbH accounting in Switzerland.

Five practical rules for a sole proprietor's bookkeeping

Working with sole proprietors, we see the same handful of mistakes year after year, and the same handful of habits that prevent them.

1. Open a separate business account before the first invoice. The mixed account in year one is the mistake we see most; every private line on it is one more line to explain, to yourself in March and to the tax office in a query.
2. Choose your format for the business you expect in three years, not the one you have today. Moving from a log to double entry later means assembling an opening balance sheet after the fact; starting with double entry costs little extra once software does the posting.
3. Photograph every receipt the day you receive it. A receipt you cannot find is an expense you cannot deduct, and thermal-paper receipts fade long before the ten-year retention period is over.
4. Treat every transfer to your personal account as a withdrawal, and book it as one. It is the one decision no software can make for you, and it is the figure that makes your year-end equity correct.
5. Set your AHV instalments on your real profit, not on last year's guess. The compensation office does not adjust them by itself, and if your instalments turn out at least 25 % too low and the shortfall is still unpaid on 1 January of the second year after the contribution year, default interest runs from that date (Art. 41bis AHVV), so top up voluntarily when profit comes in higher.