Dictionary

Basic accounting terms

• Balance sheet: A financial statement showing the assets, liabilities and equity of a company at a specific point in time in order to assess its financial situation.
• Income statement: A financial statement showing a company›s income and expenses over a specific period of time to determine profit or loss.
• Accounts receivable (receivables): Financial claims of a company against third parties, usually from deliveries of goods or services that have not yet been paid.
• Creditors (liabilities): Debts or obligations of a company to third parties, typically from the receipt of goods or services.
• Fixed assets: Long-term assets of a company that are used over several years, such as buildings, machinery or vehicles.
• Current assets: Short-term assets that are expected to be converted into cash within a financial year, such as inventories, receivables and cash and cash equivalents.
• Depreciation and amortization: Systematic allocation of the acquisition or production costs of depreciable assets over their useful life.
• Provisions: Balance sheet provision for future expenses or losses whose occurrence is uncertain, such as warranty claims or tax arrears.
• Accounting record: A statement in accounting that represents the change in the accounts due to a business transaction, typically in the format “debit to credit”.
• Chart of accounts: A systematic listing of all accounts used in a company›s accounting, often according to a standardized scheme.
• Double-entry bookkeeping: An accounting system in which every business transaction is recorded in at least two accounts to maintain the balance sheet equation.
• Income and expenditure accounting: A simplified accounting method for smaller companies that records income and expenditure without using double-entry bookkeeping.
• Liquidity planning: The planning and monitoring of a company›s solvency to ensure that it can meet its payment obligations at all times.
• Annual financial statements: An annual financial summary that includes the balance sheet, income statement and, if applicable, notes and management report to present the economic situation of a company.

Extended and specific terms

• G/L accounts: Accounts that are kept in the balance sheet or income statement to record the company›s assets, liabilities, income and expenses.
• Cost center accounting: A part of cost accounting that classifies costs according to where they are incurred (cost centers) in order to improve cost control and allocation.
• Cost object accounting: A method of cost accounting that assigns costs to the products or services (cost objects) that have caused these costs.
• Management accounting (cost accounting): An area of accounting concerned with recording and analyzing the costs of business processes in order to improve profitability.
• Financial accounting: The part of accounting that deals with the systematic recording, classification and summarization of financial transactions in order to prepare external reports.
• Internal control: Measures and procedures implemented by a company to ensure the reliability of financial reporting and prevent fraud.
• Dunning process: Process of following up on outstanding receivables by sending reminders or dunning letters to customers who have not paid their invoices on time.
• Payment run: An accounting process in which a series of payments are made to suppliers or employees at the same time.
• Cash flow statement: A financial statement showing cash receipts and payments over a period of time to show the change in liquidity.
• Accounting standards: Regulations and principles (e.g. Swiss GAAP FER, IFRS) that govern the preparation and presentation of financial reports.
• Budgeting: The process of creating a plan that includes expected income and expenses for a future period.
• Forecasting: The estimation of future financial developments based on historical data and trends.
• Invoicing: The process of issuing invoices for goods or services rendered.
• Incoming payments: Amounts of money that a company receives from customers or other parties as payment for goods or services.
• Outgoing payments: Amounts of money that a company pays for goods, services, salaries or other operational expenses.
• Discounts: Price reductions granted to customers for early payment of their invoices.
• Bonuses: Additional remuneration or rebates granted retrospectively on the basis of agreements or as a reward.
• Lease accounting: Recording and management of leases, including the associated payments and obligations.
• Project accounting: The specific accounting that focuses on the financial monitoring and management of projects.
• Notes to the financial statements: A part of the financial statements that provides additional information and explanations to the figures in the balance sheet and income statement.
• Statement of changes in equity: Documentation that shows the composition of and changes in equity within a financial year.
• Liquidity ratio: Key figure that measures a company›s ability to cover its short-term liabilities.
• Foreign currency accounting: The accounting process for business transactions that take place in a currency other than the company›s home currency.
• VAT reclaim: The process of claiming the input tax, i.e. the VAT that a company has paid on its purchases, from the tax authorities.

Accounting software and tools

• Abacus: A comprehensive accounting and business software solution developed in Switzerland and tailored specifically to the needs of Swiss companies.
• Bexio: A cloud-based accounting program for small to medium-sized enterprises (SMEs) in Switzerland that enables simple invoicing, bookkeeping and customer management.
• Sage: An internationally recognized company that offers a wide range of accounting software and solutions for companies of various sizes, including specific products for the Swiss market.
• SAP: A global leader in business software, offering complex ERP (Enterprise Resource Planning) systems that integrate financial accounting, controlling, materials management and many other business processes.
• Microsoft Dynamics: A range of ERP and CRM software applications offered by Microsoft that help companies automate and manage their financial accounting, supply chain, operations and customer relationships.

Legal and regulatory aspects

• Code of Obligations (CO): A part of the Swiss Civil Code that regulates the legal basis for contracts, companies and commercial transactions, including certain aspects of corporate governance and accounting.
• Commercial register: A public register containing essential information about companies and sole traders in Switzerland, such as company name, registered office and details of the owners or directors.
• Auditors: An independent body that audits the annual financial statements (balance sheet, income statement and notes) of companies in Switzerland in order to confirm their compliance with the law and accounting standards.
• VAT Act: The legal basis for value added tax in Switzerland, which regulates the levying, charging and payment of value added tax by companies.
• Financial Market Supervisory Authority (FINMA): The Swiss supervisory authority responsible for monitoring the financial markets, including banks, insurance companies and other financial service providers.
• Data protection in the financial sector: Regulations and practices that ensure the protection of personal data in the financial sector, in accordance with Swiss data protection law and international standards.
• Anti-money laundering regulations: Legal measures and procedures to prevent money laundering that financial institutions are obliged to implement, including the identification of customers and the reporting of suspicious transactions.

Job profiles and qualifications

• Certified accountant: A qualified specialist in accounting who has successfully passed a comprehensive professional examination in Switzerland.
• Fiduciary with a federal certificate: A specialist in fiduciary and consulting services who has acquired a corresponding professional qualification in Switzerland.
• Certified expert in accounting and controlling: A specialist with in-depth knowledge in the areas of accounting and controlling who has passed a higher professional examination in Switzerland.
• Certified auditor: A highly qualified professional who has been specially trained for the independent auditing of annual financial statements and other financial reports and has passed a corresponding examination in Switzerland.

Fiduciary

• Fiduciary account: A bank account held by a trustee on behalf of and for the benefit of a third party.
• Fiduciary: A person or firm that provides services such as accounting, tax advice, asset management and legal advice to clients.
• Accounting services: Services that focus on systematically recording, monitoring and analyzing a company›s financial transactions.
• Tax consultancy: Expert advice and support with tax planning, tax returns and tax law issues.
• Management consulting: Consulting services that support companies in improving their structures, processes and performance.
• Succession planning: Planning the transfer of company assets and management to the next generation or to new owners.
• Auditing: The independent review and assessment of a company›s financial reporting.
• Compliance management: The development and monitoring of processes to ensure compliance with legal and regulatory requirements.
• Risk management: The process of identifying, assessing and managing financial and operational risks within a company.
• Payroll: The administration of payroll, social security contributions and other tasks associated with the remuneration of employees.
• Real estate fiduciary: Services related to real estate, including management, leasing, sales and consulting.

Taxes

• Direct taxes: Taxes levied directly on the income or assets of individuals or companies, such as income tax and wealth tax.
• Indirect taxes: Taxes levied on the consumption or purchase of goods and services, such as value added tax and withholding tax.
• Withholding tax: A tax that is withheld and paid directly at the source of income, e.g. interest or dividends.
• Profit tax: A tax on the profit that companies generate.
• Capital tax: A tax on the capital or equity of legal entities.
• Tax return: The formal procedure by which individuals or companies report their income and assets to the tax authorities.
• Tax assessment: The process by which the tax authorities determine an individual›s or company›s tax liability based on the tax return submitted.
• Tax optimization: Legal strategies and measures to minimize the tax burden.
• Tax equalization: The process of adjusting the actual tax owed against the amounts paid in advance.
• Tax period: The period for which tax is calculated, usually a calendar year.
• Tax progression: The principle according to which the tax rate increases with rising income or assets.
• Lump-sum taxation: A special tax regime in Switzerland under which individuals are taxed on the basis of their living expenses rather than their overall income or assets.
• Tax amnesty: A time-limited option for the subsequent declaration of previously untaxed income or assets without prosecution.

Value added tax (VAT)

• Input tax: The VAT invoiced to a company by its suppliers and which it can deduct from its own VAT liability.
• Taxable supplies: Supplies (deliveries of goods and services) that are subject to VAT.
• Domestic tax: VAT levied on services provided in Switzerland.
• Procurement tax: A tax on services provided to Swiss recipients by companies based abroad.
• Special rates: Reduced VAT rates for certain goods or services, e.g. accommodation services.
• VAT settlement: The process of calculating the VAT owed by deducting input VAT from the VAT received.
• Net principle: The principle according to which VAT is only charged on the net value (excluding VAT) of a service.
• Tax exemptions: Certain services that are exempt from VAT, e.g. medical treatment or educational services.

Additional legal and regulatory aspects

• Civil Code (CC): Governs legal relationships between private individuals and, alongside the Code of Obligations (CO), is a central element of Swiss private law.
• Anti-Money Laundering Act (AMLA): Aims to combat money laundering and the financing of terrorism by obliging financial intermediaries to comply with certain due diligence and reporting requirements.
• Federal Direct Federal Tax Act (DBG): Regulates the levying of direct federal tax on the income of natural persons and the profits of legal entities.
• Federal Act on the Harmonization of Direct Taxes of the Cantons and Communes (StHG): Promotes the harmonization of cantonal tax laws, in particular with regard to tax objects, the tax period and tax calculation.
• Federal Value Added Tax Act (MWSTG): The specific law that regulates the collection of VAT in Switzerland, including rates, taxable supplies and the obligations of taxable persons.

Additional concepts in finance

• Cash flow statement: A financial statement that shows the changes in a company›s cash and cash equivalents, broken down into operating, investing and financing activities.
• Corporate governance: refers to the way in which a company is managed and controlled with the aim of ensuring efficient, responsible and transparent management of the company.
• Sustainability reporting: The process by which companies report on their environmental, social and governance (ESG) performance to inform stakeholders about their sustainability practices.
• FINMA circulars: Documents published by FINMA to provide interpretations and explanations of regulatory requirements and facilitate the implementation of supervisory practices.

Additional job profiles and qualifications

• Certified Public Accountant (CPA): In some countries, a professional qualification for auditors, which is equivalent to the “Dipl. Wirtschaftsprüfer” in Switzerland.
• Specialist in finance and accounting with a federal certificate: People with this qualification have in-depth knowledge of financial accounting, controlling and financial management.