Module D: FINANCESUp close and personal with your digits
So you can get your financial ducks in a row.
Next Workshop: TBA
Templates, checklists and worksheets included in this module
✓ Simple accounting sheet
✓ Profit & loss sheet
✓ Cashflow plan
✓ Invoice template
✓ Getting paid tips
✓ Accounting software overview
✓ Account structure template
FINANCE Lesson Plan
Part 1: Accounting
I Swiss accounting obligation
The duty of financial reporting is specified in Art. 957-963b of the Swiss Code of Obligations. The type of accounting required to be maintained will depend on a variety of factors including your choice of legal entity and annual revenue. We’ll take a look at those regulations to start the Finance module off on the right foot.
II Swiss accounting principles
Although not all business entities are required to keep books with double accounting, any and all businesses are subject to five accounting principles which must be adhered to at all times. We will look at the five principles and how they apply to solopreneurs and capital based companies.
III The Fiscal Year
Under normal circumstances, a company’s fiscal year coincides with the calendar year. If necessary, a company can choose a different date, and we’ll look at the cases when this can happen and how this effects the financial statements of that prolonged or shortened year.
IV Simple accounting
Certain small business entities such as the Sole Proprietorship do not require the double accounting if they have an annual revenue of less than CHF 500’000. These businesses can keep track of their finances using the simple accounting method, which means that you make exactly one booking for each deposit and withdrawal in your company. In this part we will review the simple accounting template included in this module.
V Double Accounting
Ordinary double accounting for capital based companies is defined in the Code of Obligations. The obligation to maintain accounts entails, in particular, that an inventory as well as a complete balance sheet and profit and loss account must be drawn up with all supporting documents. In this section of the module the basics of double accounting are explained. Later on in the workshop we will check out some online tools that will help you keep proper books if you decide to do your own accounting rather than outsource them to a professional.
Regardless whether you are required to keep books with the double or single accounting system, an inventory of the company’s stocked production items, finished products and equipment is needed in both cases. We’ll review a template of a small business inventory and go through a checklist that will help you ensure that nothing in your inventory slips through the cracks.
VII Annual Financial Statements & Profit Distribution
Owner of person and partnership based companies are entitled to the entire profit of their business; shareholders in capital based companies can obtain a dividend once the mandatory assignments towards a reserve has been fulfilled, provided the company made a profit during the business year. We look at a year end financial statement for both business types in this section of the module.
VIII The Balance Sheet
The balance sheet of a company is a statement of its assets and liabilities, detailing the balance of income and expenditure over the preceding period. The surplus of the assets over the debts is called pure assets, or equity. We will examine different types of business assets and liabilities with a focus on small business and look at a balance sheet template from this module.
IX Profit & Loss statement
In order to keep an eye on the pulse of their company, any entrepreneur should regularly update their profit and loss account (P&L) sheet that offsets income and expense. While an annual P&L is mandatory for most companies, it’s worthwhile drawing them up every six or even three months. We will look at a sample Profit & Loss sheet for both business types.
Setting a realistic budget is key to preventing any nasty surprises at the end of the fiscal year and is at the heart of an reliable financial planning. Because future costs and income are often difficult to estimate for start-ups, we’ll work through the basics to ensure that you’ll cover all areas of expenditures for your venture.
While setting a budget will give you an overall framework about expenditures, planning your liquidity throughout the year is absolutely vital to ensure your company’s survival. After all, nine out of ten bankruptcies in Switzerland are caused by liquidity bottlenecks. We spend a good chunk of the finance section looking at the process of liquidity planning, but also at trouble shooting methods when liquidity gets tight i.e. your customers pay late or not at all.
Finally, cashflow is the best measure to assess the financial and earnings power of a company. In this part we will look at how it is calculated and why it is so important if you want to secure external funding for your business.
XIII Key figure monitoring
In order to keep an eye on any company’s finances, there are several methods of key figure monitoring, such as liquidity control, customer control, storage, profitability. We’ll touch briefly on the formulas for these calculation methods.
XIV Online accounting tools
If you decide to do the accounting for your small business yourself, there are several online tools that can assist you with getting the job done. We’ll look at a selection of Swiss based software that will help you file for VAT and create year and reports, as well as some international applications.
Most small businesses in Switzerland do not meet the criteria for a regular audit by a certified third party. This means that their annual financial statements are subject to a restricted audit. In this section you’ll learn how the annual general meeting will perform this task and how to opt-in and opt-out of a company’s audit status.
Apart from the financial statements audit, your business may also become subject to a social security or tax audit at any point in time. We will look at how to best prepare your records for these kinds of audits.
XVI Banks & Bank Accounts in Switzerland
Depending on your chosen legal firm you may set up a private account or a business account for your business. We check out a selection of startup packages from Swiss banks for small business, look into online banking and EC and credit card possibilities.
Part 2: Taxes
XVII VAT Added Tax
Any company with an annual revenue over CHF 100’000 in Switzerland is liable to pay Value Added Tax (VAT). VAT is a general consumption tax and is passed onto the consumer. In this part of the module we’ll get to know the inner workings of this tax, check out how you register for a VAT number and examine the two separate filing methods. Finally we explore the online tool from the Swiss Tax administration to file your VAT returns online.
XVIII Corporate Tax
In Switzerland taxes are levied on three levels: federal, cantonal and municipal. While your business has to pay its dues to all three levels in any case, depending on your chosen legal entity, a distinction is made between taxation type as:
– natural persons must pay income and capital taxes;
– legal entities must pay profit and capital taxes.
We’ll look into how these taxes differ for the main entities (Sole Proprietorship, Limited Liability Companies and Public Limited Companies) and also take a quick look at the company tax rate landscape in Switzerland.
1 ModuleEarly Bird Rate
- Individual price for one live workshop including worksheets and refreshements.
2 ModulesEarly Bird Rate
- Package price for two modules bundle (morning or afternoon) including worksheets and refreshments.
4 modulesEarly Bird Rate
- Package price for full day 4 module workshop, including worksheets and refreshments. Excluding lunch.