Simple Accounting: How to Keep Track of Your Finances

Simple accounting is a practical and efficient system designed specifically for sole proprietorships with low turnover. Learn how to keep your finances organised and why this method is ideal for small businesses.

As the owner of a sole proprietorship in Switzerland, accounting is one of the central tasks of managing your business. It not only helps you keep track of your finances, but also ensures that you comply with legal requirements. The best part: if your annual turnover is below CHF 500,000, you can rely on simplified accounting. This approach is less time-consuming and easy to implement. Here you will receive an introduction to the basics and learn how to organise your accounting efficiently.

What is simple accounting?

For sole proprietorships in Switzerland with an annual turnover of less than CHF 500,000, double-entry bookkeeping is not required (Art. 957 CO). Instead, simple accounting based on an income-and-expense statement is sufficient — also known as “milk bookkeeping.” This means:

• Income: You record all income from your business activities.
• Expenses: Business-related expenses are carefully documented.
• Receipts: Every transaction is supported by a receipt (e.g. invoice or receipt).

Simple accounting follows the so-called cash basis principle. This means that income and expenses are only recorded when money actually changes hands — not already when the invoice is issued.

Unlike double-entry bookkeeping, there is no balance sheet and no income statement. Profit is simply calculated from the difference: Income - Expenses = Profit. This profit forms the basis for your income tax and AHV contributions.

Who is allowed to use simple accounting?

Simple accounting is available to the following types of businesses:

• Sole proprietorships with an annual turnover below CHF 500,000
• General partnerships with an annual turnover below CHF 500,000

LLCs, corporations, and other legal entities are not eligible — they must always maintain double-entry bookkeeping, regardless of turnover.

Important: Once your turnover exceeds the CHF 500,000 threshold, you must switch to double-entry bookkeeping. Plan this transition in good time.

The advantages of simple accounting

• Time savings: Compared to double-entry bookkeeping, the effort required is significantly lower. No offsetting entries, no chart of accounts, no balance sheet.
• Cost savings: You do not need expensive accounting software or professional support. A lean tool like Effizo is sufficient.
• Clarity: Thanks to the clear structure, you always have your finances under control.
• Focus on what matters: Instead of dealing with journal entries and charts of accounts, you concentrate on your core business.
• Fewer sources of error: Less complexity means less room for mistakes.

What do you need to record?

Even though simple accounting is straightforward, there are minimum requirements:

• All income: Every payment you receive for your business activities — including cash receipts.
• All expenses: Every business expense, from material costs to rent to software subscriptions.
• Receipts for every entry: No receipt, no entry — this basic rule also applies to simple accounting.
• Asset statement: At the end of the year, an overview of your business assets (account balances, outstanding receivables, inventory).

Tip: Record every entry with date, amount, description, and category. This way, you can find everything quickly later and the tax return becomes much simpler.

Important tips for successful implementation

• Use digital tools: Use programs such as Effizo to efficiently organise income, expenses, and receipts.
• Regular maintenance: Do not postpone your accounting tasks. Update your data weekly to maintain oversight and avoid stress.
• Receipt management: Scan or photograph receipts and store them digitally. This way, you keep all documents secure and readily accessible at any time.
• Separate private and business finances: A separate business account is essential. Avoid mixing private and business expenses.
• Define categories: Set fixed categories for your expenses (materials, office, insurance, vehicle, etc.) to make tax returns easier.

Simple accounting and VAT

Even if you use simple accounting, you can still be VAT-liable at the same time — the two topics are independent of each other. The VAT obligation starts from CHF 100,000 annual turnover, while the obligation for double-entry bookkeeping only begins at CHF 500,000. Many sole proprietorships therefore fall in between and maintain simple accounting with VAT returns. Learn more in our article on VAT accounting for sole proprietorships.

Avoiding common mistakes

Even with simple accounting, there are typical pitfalls:

• Not retaining receipts: In Switzerland, there is a retention obligation of 10 years — including digital receipts.
• Forgetting cash income: Cash payments must also be recorded in full.
• Not documenting private withdrawals: If you use money from the business account for private purposes, this must be documented.
• Postponing accounting: Those who push everything to the end of the year risk errors and unnecessary stress.

Conclusion

With simple accounting, you have a practical tool at hand that helps you manage your sole proprietorship successfully — without unnecessary effort. It is legally compliant, time-saving, and perfectly adequate for most sole proprietorships in Switzerland. Take advantage of this opportunity to make the administrative side of your business as stress-free as possible.

Effizo offers you all features at a fixed price — from the dashboard to VAT accounting. For more practical advice, read our articles on tips for organising your accounting and tax declarations for sole proprietors. If you currently use double-entry bookkeeping, check out our guide on switching to simple accounting.