Double-entry bookkeeping
Commercial bookkeeping in which every business transaction is recorded on two accounts (debit and credit). It is mandatory for a GmbH and an AG and provides a complete picture of the financial position at any time.
Double-entry bookkeeping (doppelte Buchhaltung) is the standard commercial method in which every transaction is recorded on at least two accounts — a debit and a matching credit. This keeps the books permanently in balance and allows a full balance sheet and income statement to be produced at any time. In Switzerland it is mandatory for companies such as a GmbH or AG and for sole proprietorships and partnerships above CHF 500'000 in annual turnover.
Example: When a company pays a CHF 1'000 supplier invoice from its bank account, the bookkeeper credits the bank account by CHF 1'000 and debits the expense (or payables) account by the same amount — two entries that keep the accounts balanced.
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Who must keep double-entry accounts in Switzerland?
Legal entities such as a GmbH and an AG must always do so, as must sole proprietorships and partnerships with annual turnover of CHF 500'000 or more. Smaller sole proprietors may use simplified 'income-and-expenses' accounting.
What is the difference between single- and double-entry bookkeeping?
Single-entry (the 'milk-book' method) merely tracks income, expenses and assets. Double-entry records every transaction twice, as debit and credit, producing a balanced ledger and a complete balance sheet and income statement.