Browser-based and cost-effective business software helps to simplify and partially automate many activities of a classic accounting. As a result, more and more SMEs are moving away from complete outsourcing and are managing the “daily business” with their existing resources. The trustee is then called in specifically when needed, such as when resources are scarce, for special issues as well as for year-end closing activities and tax issues.

Unfortunately, the efficiency gained (e.g. thanks to automatic bank reconciliation) as well as the cost reduction is often wasted due to expensive reconciliation work by the accountant during the annual financial statement. With the following measures, you can prevent this from happening, simplify your trustee’s life and thus keep the costs of annual accounts as low as possible.

  1. Check the opening balance sheet at the beginning of the business year with the closing balance sheet of the previous year
  2. Transfer the profit (or loss) of the previous year and allocate it to reserves in accordance with the AGM Minutes
  3. Reconcile and document the bank after each month-end (save PDF of the e-banking statement and the account sheet of the accounting software)
  4. Reconcile customer and vendor open item lists with the balance sheet items (usually accounts 1100 and 2000) as of the balance sheet date, find the cause of any differences and correct them if necessary (if the PDF files of accounts 1100 and 2000 and the open item list match, save the list)
  5. Recording services not yet invoiced or work in progress as well as inventory as soon as possible around the balance sheet date
  6. VAT reconciliation: Has the VAT credit or liability of the previous year been balanced with the payments in the following quarter (this can be easily seen when the VAT balances are transferred to the account “2201 Settlement account VAT”)? Are all entries in the VAT system accounts 1170, 1171, etc. and 2200 with tax codes? For advanced users: Create or prepare VAT reconciliation
  7. Payroll accounting: comparison of accounts 5XXX (wages, allowances, bonuses, etc.) with the AHV gross wage total. Tracking differences (usually daily allowances and persons not subject to AHV are the reason for differences). Submit social insurance notifications at the beginning of January so that the final accounts are available in good time. This simplifies reconciliations in personnel expenses.
  8. Pay out expenses separately from salary payments: This simplifies the search for differences in the annual accounts.
  9. Accrual of operating expenses: Check whether 12 rentals, 12 Internet monthly invoices, etc. have been posted. If not, accruals/deferrals (e.g. mobile bill December, “6510 Telephone” to “2300 Accrued expenses and deferred income”); on the other hand, consider accruals of advance payments such as memberships for next year by posting to “1300 Accrued expenses and deferred income”.
  10. Posting texts are completed with the respective period, for tax calculations e.g. “State and municipal tax on account 2017” or “Direct federal tax definitely 2016”. This simplifies accruals and deferrals in annual financial statements.

Bonus tip for startups: Consider a long business year. Many young entrepreneurs are unaware that they can extend their company’s first fiscal year to up to 23 months, depending on the canton. This makes annual financial statements and tax returns unnecessary (e.g. foundation in March 2019 -> first business deal as of 31.12.2020).

If you have any questions about your annual financial statements, we will be happy to assist you. Our aim is to ensure that SME accounting systems generate benefits instead of looking for their raison d’être in articles of law. And we help you to get rid of unnecessary ballast and streamline your accounting processes with state-of-the-art apps and lean accounting methodology.

© 2020 leanrun ag (ltd)