What is a 'Milchbüchlein'? Swiss simplified accounting explained

If you’ve researched accounting for the self-employed in Switzerland, you may have come across the German term “Milchbüchlein” (literally “little milk book”). It comes up constantly in German-speaking Switzerland, but it describes a concept that applies equally to sole proprietorships across the whole country.

Where does the term come from?

The name refers to the small notebooks Swiss farmers once used to record their daily milk deliveries to the dairy – date, quantity, nothing more. No chart of accounts, no double-entry bookkeeping, just a simple chronological list. That’s exactly the principle behind today’s simplified accounting (income-and-expenditure method), which Swiss law allows for most sole proprietorships.

Who does this method apply to?

Swiss law allows sole proprietorships with annual turnover under CHF 500,000 to keep simplified accounting instead of full commercial bookkeeping with a balance sheet and income statement. That covers the vast majority of Swiss sole proprietorships and self-employed professionals.

Note: VAT liability starts at CHF 100,000 turnover regardless of this threshold. Between CHF 100,000 and CHF 500,000, you’re VAT-liable but can still keep simplified accounting. When exactly the registration deadline starts running is covered in the article on VAT registration.

Two details about the threshold are easy to miss:

• What counts is turnover excluding VAT. Anyone sitting just under the limit and reasoning in gross figures distorts their own answer.
• It is the last completed financial year that decides. You do not switch mid-year, but for the year following the one in which you crossed it.

What the law actually requires

The legal basis is Art. 957 para. 2 CO. It names three things, not two: accounts of income, of expenses – and of the asset position.

The third is routinely overlooked. It does not mean a balance sheet in the commercial sense, but the ability to say at any time what belongs to the business: the business account balance, the invoices still outstanding, what you owe suppliers, larger purchases such as a vehicle or machinery.

In practice: a bare list of income and expenses falls just short of the rule. But as soon as you track your open items and reconcile your business account properly, the asset position emerges by itself – one more argument for a separate business account.

What simplified accounting actually contains

• Income – every invoice, every payment received, recorded chronologically
• Expenses – receipts for materials, rent, insurance, vehicle costs, and similar
• One receipt per entry – every line item must be traceable to a supporting document
• A running total – income minus expenses gives you your profit or loss
• The asset position – open receivables, open supplier invoices, the account balance, larger purchases

No balance sheet, no asset register, and no depreciation schedule required as long as you stay under the threshold.

Why a plain spreadsheet often isn’t enough

Many people start with a spreadsheet – understandable, but limited: receipts have to be filed separately, VAT calculations are done manually, and during a tax audit, the traceability between an entry and its receipt is often missing. That’s exactly where dedicated software makes a difference.

What to look for in accounting software for this method

• Automatic receipt linking – every receipt directly connected to the matching entry
• VAT support – both the net tax rate and effective methods, if you’re VAT-liable
• Simple to use – usable without accounting knowledge, in plain language
• Export for your tax return – your numbers should be ready to prepare for your tax filing directly

Effizo was built exactly for this use case: simple bookkeeping that mirrors this method digitally, with AI-powered document capture and automatic VAT calculation.

Ten years of retention – digital is fine

Books and accounting records must be kept for ten years, counted from the end of the financial year (Art. 958f CO). Electronic retention is permitted, as long as the records can be made readable at any time and later changes remain detectable.

That is the real difference from the historical milk book: the content has stayed the same, the retention has not. A receipt tied to its entry inside software meets the requirement more reliably than a shoebox – and is still findable ten years on.

If you cross the threshold

If you reach turnover of CHF 500,000 or more in a financial year, ordinary accounting applies from the following year: double-entry, with a balance sheet and income statement. That is no cause for panic, but it is a change that needs preparing – and it is easier to plan when the current year’s figures are known rather than estimated.

The reverse happens more often than you would think: anyone who has kept double-entry books and falls back under the threshold may switch back. What to watch out for – especially open receivables, which otherwise get taxed twice – is covered in the article on switching from double-entry to single-entry bookkeeping.

Conclusion

The “Milchbüchlein” method isn’t outdated – it’s the pragmatic, legally recognised solution for the vast majority of Swiss sole proprietorships, regardless of language region. The term might sound old-fashioned, but the right software turns it into a digital, automated process that saves you time and gives you confidence at tax time.

Learn more: Simple Bookkeeping, or read our article on getting an overview of your finances. And because the profit from this calculation is charged twice – by the tax office and by the AHV – the article on AHV contributions for the self-employed is worth a look alongside it.