Self-employed? This makes single-entry bookkeeping easy.

I couldn't help but wonder... wouldn't it be nice to simply fall in love with bookkeeping?  

Singles looking for love have a lot to put up with. Overcrowded dating apps, catfish profiles and bad first dates are just the beginning. Self-employed people – the singles of the working world – have it much easier up to a certain revenue: their rendezvous with the Swiss tax system is not that complicated thanks to ‘single-entry bookkeeping’. Or can something really be difficult that is also known as ‘Milchbüechli’ – a ‘milk book accounting’?  

How to fill out your tax return as easily as a Tinder profile, and why it's still a good idea to keep things organised from the start.   

Single-entry bookkeeping for the self-employed – or not?  

When it comes to taxes self-employed people in Switzerland have a choice: unlike legal entities such as public limited companies (PLC) or limited liability companies (LLC), they are not necessarily required to use double-entry bookkeeping. Single-entry bookkeeping may be entirely sufficient.

After all, in tax matters as well as in love, there are various ways and means of achieving your goal. Let us take a closer look at these two options. 

Single-entry bookkeeping: The Tinder of taxes 

Self-employed people with an annual turnover of up to CHF 500,000 can use ‘single-entry bookkeeping’. This simply means comparing your income with your expenses and listing your assets. Because the principle is so simple, single-entry bookkeeping is also known as ‘milk book accounting’. Self-employed people can even use their private bank account for all their transactions. However, a separate business account makes accounting much clearer.  

Single-entry bookkeeping is just as easy as finding your first matches on Tinder – and don't worry: you don't actually have to be ‘single’ for this method of accounting. ‘Single-entry’ simply means that every income and expense is only listed once, which makes accounting a lot easier. Nevertheless, you should read on, because there is always something to consider. After all, the first match doesn't have to be the perfect match.  

Double-entry bookkeeping: the Parship of taxes 

Self-employed individuals with an annual turnover of CHF 500,000 or more are required to use double-entry bookkeeping. This is also known as commercial accounting and includes, among other things, a chart of accounts, a balance sheet and an income statement.   

This is where things get serious – and that's exactly why double-entry bookkeeping is the Parship of taxes. After all, you don't sign up for Parship unless you are seriously looking for love. Nevertheless, double-entry bookkeeping can also be useful below the revenue threshold: for example, to prepare for growth or to help with negotiations for loans with banks.   

We are happy todiscuss with you personally   whether double-entry bookkeeping is right for you. We can't help you in matters of love, but we can certainly help you with tax issues.

Single-entry bookkeeping – simple like a Tinder profile  

Can accounting really be as easy as Tinder? Anyone who has ever created a Tinder profile knows that although it's quick and easy, it's still worth investing a little more time and effort. That way, you can get the most out of your dating profile. And the same applies to single-entry bookkeeping.  

Income: What your Tinder profile reveals  

When it comes to online dating, the first step is providing the right information about yourself. Your next partner will probably be most interested in your job, what you like to do and what else makes you who you are. After all, love should be a good fit on many levels. 

For your self-employment, only your professional life is relevant, as you must first list your income. In single-entry bookkeeping, income is everything that is charged to customers – from consulting to product sales, this can vary greatly depending on the industry.   

It is essential that all the income for a tax year is listed in the single-entry bookkeeping system. The tax year simply corresponds to the calendar year. You should note the following in any case:  

• You can use either the actual or the accrual method for invoicing. If an invoice is issued in December but not paid until the new year, it will be included in either the current or the following calendar year, depending on the method used. Choose one method and stick to it.  

• If you invoice in different currencies, this must be clearly visible on the income statement.  

• VAT – the value added tax – is payable in Switzerland on turnover exceeding CHF 100,000. You can also register voluntarily below this threshold, but more on that later. In any case, the VAT charged must be included in the income statement.  

Does single-entry bookkeeping still sound complicated? Then let's discuss the basics in person. We will be happy to pair you up with the tax office.

Expenses: What you expect from Tinder matches  

Presenting yourself in a favorable light is only one aspect of online dating. You also need to know what you are looking for in order to find it. On Tinder, for example, you can narrow down your search by age or location for better matchmaking.   

Single-entry bookkeeping, on the other hand, is about reducing your tax burden by claiming your expenses. You can deduct all costs related to self-employment: from pens to travel expenses and lunches with customers to liability insurance. Social security also falls into this category. We have another tip for that matter coming up.

For self-employed people in particular, the boundaries between work and private life are often blurred, and with them the costs. For example, you can also deduct part of your rent or mobile phone costs if you work from home or use your phone for both private and professional purposes. It is important to use common sense here, as you should avoid two extremes:  

• Some self-employed people declare far too few expenses. They don't even know which costs they can deduct. That would be like not setting any restrictions on Tinder.  

• Other self-employed people list all their private expenses in their bookkeeping. Of course, that's not allowed either. You might as well set your Tinder preferences so that your match lives in the flat next door and is called Thomas. (But then you could just talk to Thomas in person, couldn't you?)  

We recommend that you seek tax advice, especially when it comes to expenses. What is really deductible always depends on the business model and individual case. For example, trips with a private vehicle or the warehouse at home can also be relevant. Let's just talk about it personally. It's better than just swiping and chatting anyway.

Take single-entry bookkeeping seriously  

We often see ‘bookkeeping’ that we would immediately swipe left on Tinder: it's not neatly organised, difficult to read or doesn't contain the most important information. With the following tips, you can avoid this and make your life easier. Even if we are on Tinder – we can still make an effort.   

1. File receipts and keep things tidy – right from the start  

Even with single-entry bookkeeping, the rule is: no receipt, no deduction. This means you need to keep all your receipts safe – for 10 years. Throwing everything into a shoebox is definitely not a good idea. Keep things tidy from the start and file your receipts carefully.   

It is best to store all receipts digitally and name them appropriately, for example by invoice date and with consecutive numbers. Otherwise, receipts on thermal paper in particular may fade and become illegible. Not to mention the mess.  

2. Think about tax all year round  

It is much easier to file everything digitally if you take care of your filing regularly. So set aside some time each month for your taxes. Divided into twelve small chunks, accounting is much easier to digest. And you always know where you stand.  

Speaking of which: social security contributions, such as AHV and IV, are also deducted from your income. At the beginning of the year, the social security institution asks for your estimated annual income and then sends you invoices on account. Keep an eye on these too, as you can correct any estimates that are too low or too optimistic during the year. This will save you relatively high interest on arrears, especially if you have a much higher income!

3. Keeping an eye on value added tax   

Up to CHF 100,000 per year, single-entry bookkeeping is particularly easy, as you don't have to worry about value added tax. If you exceed this limit, you must register for VAT with the Federal Tax Administration for the following year. However, this can also be useful on a voluntary basis, for example to make your self-employment appear more substantial or to save VAT on your own expenses.  

In any case, if you are liable for VAT, it must be clearly stated. Your income and expenditure must therefore show how much VAT has been paid. By the way: collecting VAT and then not paying it is not a good idea! Because yes, someone has already tried that. If this applies to you, it may be time for self-reporting without penalty. And in any case, it's about time for sometax advice.

4. Use our template for single-entry bookkeeping  

Even though ‘Milchbüechli’ sounds nice, you should not keep single-entry books by hand in a notebook. It is best to use a template designed for income and expenditure accounting. We are happy to provide our customers with our template for single-entry bookkeeping. And, of course, we will help you with using correctly.

5. Filling in the correct form on your tax return  

With our template and a little care, the income and expenditure account should provide the perfect overview of your bookkeeping. You can then transfer this information toyour tax return. Or you can focus on your core business and simply leave the tax return to us.

In the canton of Zurich, by the way, the corresponding form is called "Auxiliary form A for self-employed persons with simplified bookkeeping". In other cantons it is often called something else, but in principle it always works the same.

Luck with love, planning and an overview for your taxes  

In their search for true love, singles can sometimes lose hope – after all, finding the right person also requires luck. The beauty of self-employment, on the other hand, is that you have everything under control: even single-entry bookkeeping. With a little planning and care, you can make your tax returns (almost) a pleasure. You've already found the right support. With taxum AG as your tax advisoreverything suddenly feels easier, almost like being in love.

And just like that... bookkeeping is so simple that you have more time for love – or for your actual business.