Accounting

Accounting serves as a central information tool for internal (management, board of directors) and external recipients (shareholders, creditors, public), with the former having full and the latter only limited access to insights. Different accounting rules are applied in financial reporting, leading to differences between the internal and external presentation of the financial situation such as the "hidden reserves".

Companies registered in the commercial register and sole proprietorships with an annual turnover of more than CHF 100,000 are required to keep accounts. Accounting includes the complete and accurate recording of business transactions as well as the preparation of the balance sheet and income statement.

Good accounting software for start-ups should be modular and offer introductory courses as well as telephone support. It must guarantee ease of use and expandability for invoicing and payroll.

The management of accounting in one's own company depends on prior knowledge; without prior knowledge, an accounting course is recommended. With a commercial background, the accounting can be managed by oneself.

The obligation to keep accounts depends on the obligation to register in the commercial register, not on the registration itself; for sole proprietorships, this obligation begins with a turnover of CHF 100,000. Companies such as general partnerships, LLCs, and corporations must keep accounts regardless of turnover.

The liabilities on the balance sheet reflect who provides capital to the company, divided into debt and equity. Debt encompasses liabilities, while equity shows the ownership claims.

The asset side of the balance sheet shows the assets of a company, divided into current assets (e.g., cash, receivables, inventories) and fixed assets (long-term assets such as office equipment). Current assets are ordered by liquidity, with cash listed first and less liquid items such as receivables listed last.

The income statement of a company juxtaposes expenses and revenues annually to determine success. It is an essential financial instrument.

A balance sheet compares assets (assets) and liabilities (liabilities) of a company. Assets are divided into current and fixed assets, liabilities into debt and equity.