Accounting

The limited audit is designed for SMEs that do not need to conduct a full audit; it is less thorough and only provides a negatively formulated assurance. Companies are allowed to perform it if they do not exceed certain size criteria, unless they have fewer than 10 full-time positions.

Companies in the commercial register must retain business books, receipts, and reports for 10 years. Business books can also be stored electronically; reports must be signed.

The dissolving of hidden reserves in the income statement leads to inflated profit. Their formation is legally permissible in Switzerland.

Art. 960e of the Swiss Code of Obligations requires provisions for uncertain liabilities and impending losses; these act as external capital with an indefinite amount or timing. Unlike short-term transitory liabilities, provisions are often medium to long-term and cover risks such as legal disputes or pending transactions.

The balance sheet shows the financial position of a company by comparing assets and liabilities. It is prepared annually and includes current and fixed assets and various types of capital.

Employee contributions to social security are deducted directly from the salary (accounting entry: payroll expense/creditors). Employer contributions are recorded through the expense account (social benefits/creditors).

Small businesses use open-item accounting without individual debtor/creditor accounts and instead keep two folders each for outstanding and paid invoices. Outstanding invoices are totaled for the year-end inventory, and paid invoices are recorded upon receipt or payment.

Purchases are directly recorded as cost of goods expense, appropriate when the items are sold within the same period; the inventory remains invisible. Sales are recorded daily based on the cash register tape, thereby avoiding additional entries.

Inventory management is carried out by individual recording of goods purchases; sales generate two booking entries and show the current inventory value. The method continuously captures inventory discrepancies, enables a current inventory overview, and provides precise sales analyses.