The software shows a profit. The bank account looks adequately funded. Sales are rising. Everything seems fine—until the tax bill, holiday pay, a defaulting customer and a lower-than-expected margin all arrive at once.
Interim accounts are designed precisely to avoid this kind of surprise gathering. They replace neither day-to-day bookkeeping nor annual financial statements. They turn the data already recorded into a sufficiently reliable snapshot to support decisions while there is still time to act.
For an SME with a December 31 year-end, a review as of April 30, June 30 or September 30 can reveal a deterioration several months before the annual closing and its checks. The value of the exercise lies not in the thickness of the report, but in the quality of the decisions it enables.
At a glance
- A trial balance simply exported from the software does not yet constitute reliable interim accounts.
- Material period-end adjustments must be included: missing invoices, work in progress, inventories, depreciation, wages, social security contributions, provisions and taxes.
- Profit must be assessed alongside cash flow, receivables, upcoming commitments and a forecast through to the end of the financial year.
- There is no general obligation for every SME to close its books monthly, but the governing bodies’ duties to monitor solvency and take action apply throughout the year.
- A quarterly review is often sufficient for a small, stable business; a monthly review may be necessary during rapid growth, in seasonal businesses or when cash is tight.
Interim accounts are not a pointless “mini closing”
Interim accounts establish the financial position at a chosen date during the financial year. They generally include a balance sheet, an income statement and a few analyses tailored to the business. Their level of precision depends on the decision to be made: monitoring margins does not always require the same level of detail as a financing application or an assessment of overindebtedness risk.
Three frequently confused levels must be distinguished:
- Day-to-day bookkeeping records transactions and shows the available account balances.
- Management accounts adjust the main timing differences and put the figures into context against the budget, the previous financial year and the objectives.
- Statutory interim accounts under Article 725b of the Code of Obligations (CO) address a specific situation: reasonable grounds for believing that the company is overindebted. They follow stricter rules and must, in particular, be audited.
An SME therefore does not need to repeat the entire annual closing process every month. However, it must avoid the opposite extreme: managing the business using an unadjusted income statement that omits supplier invoices, leaves inventories unadjusted and will only recognize depreciation in December. A figure shown to two decimal places may still be highly approximate in substance; Excel has never guaranteed the truth, only the alignment of cells.
Why waiting for the annual closing can prove costly
An inadequate margin continues to deteriorate
Revenue can grow while profitability falls. Higher purchase prices, more unbilled hours, commercial discounts or an incorrect valuation of work in progress can erode margins without being immediately visible. If the discrepancy is only discovered at year-end, the business may have been selling at inadequate prices for twelve months.
Interim accounts make it possible to compare margins by activity, customer, project or product category. They help adjust prices, the scope of services, purchasing or organization before the deterioration becomes structural.
Profit conceals a liquidity problem
A sale increases profit as soon as it is recorded, but it only pays wages once the customer settles the invoice. Rapid growth can even consume cash: wages, goods and VAT must be financed before payment is received.
The interim review must therefore reconcile profit with the payment schedule. Overdue receivables, funds tied up in inventory, tax installments, social security contributions, investments and loan repayments must be included in a cash flow forecast. Profit and liquidity are cousins, not twins.
Tax and social security provisions come too late
A profitable business must set aside the funds needed for its taxes. It must also anticipate holiday pay, bonuses, commissions, social security contributions, VAT settlements and other obligations already incurred. Without interim accounts, the manager may regard as available cash that already belongs in part to the authorities, social insurance schemes or employees.
An updated estimate helps adjust cash reserves and, where cantonal procedures allow, revise tax installments. It also avoids decisions on remuneration or distributions based on an overly optimistic picture; our article on the choice between salary and dividends for company managers explains the main considerations.
Financing becomes harder at the wrong time
A bank or investor is generally more receptive when a business presents recent, consistent figures accompanied by a plan. Waiting until cash is exhausted reduces both the options and the time available for negotiation. Credible interim accounts can document a temporary need, explain a variance and demonstrate the measures already taken.
Example: a CHF 120’000 profit becomes CHF 8’000
As of May 31, an SME reports a provisional accounting profit of CHF 120’000. The interim review nevertheless identifies several items that have not yet been included:
| Item to adjust | Effect on profit | Reason |
|---|---|---|
| Supplier invoices relating to the first five months | – CHF 30’000 | Services received but invoices not yet recorded |
| Value adjustment on disputed receivables | – CHF 22’000 | The carrying amount is unlikely to be collected in full |
| Overvalued inventories and work in progress | – CHF 25’000 | Insufficient quantities, stage of completion or realizable value |
| Accrued holiday pay, working hours and social security contributions | – CHF 15’000 | Obligation already incurred but not yet paid |
| Depreciation for the first five months | – CHF 20’000 | Economic consumption of fixed assets |
| Adjusted profit before tax | CHF 8’000 | A more realistic basis for decisions and forecasts |
The initial figure did not necessarily result from poor bookkeeping. It simply answered a different question: which entries had already been recorded? Interim accounts answer the question that matters to management: what economic result have we actually generated as of this date, based on the information reasonably available?
What needs to be checked to obtain usable figures?
| Area | Essential checks | Useful management insight |
|---|---|---|
| Bank accounts and cash | Reconciliations, cards, financing and payments in transit | Cash actually available |
| Customers | Invoices issued, unbilled work, aged receivables, disputes and subsequent receipts | Collection period and risk of loss |
| Suppliers | Invoices received or outstanding, committed orders and due dates | Actual expenses and future cash outflows |
| Inventories and work in progress | Quantities, stage of completion, obsolescence, realizable value and consistency of the method | Capital tied up and accurate margins |
| Personnel | Wages, holidays, working hours, bonuses, commissions and social insurance | Full cost of resources |
| Fixed assets | Acquisitions, disposals, depreciation and indications of impairment | Investments and cost of use |
| Taxation | VAT, tax estimates, related-party current accounts and special transactions | Amounts to set aside and adjustments to address |
| Forecasts | Budget, actual results, previous financial year, orders and cash flow scenarios | Likely year-end outcome |
Indicators should remain few in number and reflect the business model: gross margin, billing rate, order backlog, average collection period, payroll, inventory turnover, projected cash flow or profitability by engagement. A dashboard with forty ratios that nobody reads is mainly excellent digital decoration.
Monthly, quarterly or half-yearly: which frequency should you choose?
The law does not set a universal frequency for management accounts. The review schedule should reflect how quickly the situation can change and how long it takes to correct a deterioration.
- A monthly review is often appropriate when cash is tight, payroll is substantial, margins are low, the business operates through projects, inventories are significant or the company is growing rapidly.
- A quarterly review often suits a small, stable business with up-to-date bookkeeping and predictable flows.
- A half-yearly review may be sufficient for a simple, low-risk activity, but it already gives a pricing error or deterioration in receivables six months to take hold.
Materiality also matters. There is no need to calculate every annual subscription to the nearest franc if the estimate does not affect any decision. By contrast, work in progress, inventories, doubtful receivables and personnel expenses can radically change the interpretation of the accounts and warrant a documented method.
The legal perspective: governing bodies cannot wait until December
For a Swiss public limited company (SA), the board of directors must monitor the company’s solvency under Article 725 CO. If insolvency threatens, it must take measures to safeguard solvency and, if necessary, propose restructuring measures to the general meeting. It must act promptly. These duties do not arise only at the annual closing.
The loss of capital under Article 725a CO is formally determined from the latest annual financial statements: it exists when assets, after deducting liabilities, no longer cover half the sum of the share capital, the statutory capital reserve and the statutory retained earnings reserve that may not be repaid to shareholders. Management accounts may nevertheless reveal that this threshold is likely to have been reached or is close; the governing body would be ill-advised to ignore the warning until the next annual closing.
Where there are reasonable grounds to believe that liabilities are no longer covered by assets, Article 725b CO requires interim accounts to be prepared immediately at going-concern and liquidation values, subject to the distinctions provided by law. These accounts must be audited by the statutory auditor or, in the absence of one, by a licensed auditor. If overindebtedness is confirmed, notifying the court is the rule, except in particular where claims are sufficiently subordinated or there is a substantiated prospect of eliminating the overindebtedness within the statutory period without further jeopardizing creditors.
These provisions apply by analogy to a Swiss limited liability company (Sàrl). They do not apply in the same way to a sole proprietorship, whose owner is personally liable; liquidity, tax and business continuity issues nevertheless remain fully relevant. The structural differences are explained in our comparison of sole proprietorships and Sàrl companies.
The opposing view
It is true that no rule requires every small business to prepare complete interim accounts each month. An excessively burdensome closing process can cost more than the information it yields. However, this argument justifies a proportionate approach, not an absence of monitoring. The more fragile cash, capital or margins become, the faster and more reliable the information must be.
A practical method in six steps
- Set the date and objective. Margin monitoring, tax forecasting, financing, cash flow or a legal warning: the level of precision depends on the purpose.
- Update the books. Record bank transactions, sales, purchases, wages, VAT and unusual transactions up to the chosen date.
- Reconcile sensitive items. Check bank accounts, cash, receivables, payables, inventories, work in progress, wages and current accounts.
- Post material adjustments. Period allocations, depreciation, value adjustments, accrued expenses and tax estimates.
- Compare. Assess actual results against the budget, the previous financial year and operational indicators. Explain variances rather than merely color-coding them.
- Forecast and decide. Estimate profit and cash through to year-end, assign each measure to a person and set a deadline.
What should you do when a variance appears?
| Finding | Questions to ask | Possible actions |
|---|---|---|
| Declining margin | Prices, purchasing, productivity, unbilled hours or sales mix? | Review prices, negotiate purchases, improve processes or discontinue a loss-making offering |
| Rising receivables | Late invoicing, disputes, excessively long payment terms or insufficient follow-up? | Invoice sooner, request advance payments, resolve disputes and structure collection follow-up |
| Tight cash flow | Temporary problem or loss-making business model? | Cash flow plan, reduced commitments, negotiated payment deadlines and documented financing |
| Profit above budget | Lasting, exceptional or incomplete effect? | Set aside tax reserves, finance investments and avoid premature distributions |
| Deteriorating equity | Loss of capital or suspected overindebtedness? | Immediate legal assessment, restructuring measures and coordination with the auditor and relevant specialists |
How Delta Conseil SA can support you
Delta Conseil SA can prepare interim accounts tailored to the size and risks of the business: updating and reconciling accounts, period-end adjustments, margin and receivables analysis, tax estimates, cash flow planning and forecasts through to the end of the financial year.
Where the figures reveal a loss of capital, a risk of insolvency or signs of overindebtedness, we help management document the situation and promptly coordinate the work with the statutory auditor, a licensed auditor and, if necessary, a legal specialist. Management accounts must then be distinguished from the statutory interim accounts required by Article 725b CO.
Caution
The reliability of interim accounts depends on the quality of the data, estimates and knowledge of events not yet recorded. They constitute neither an audit nor a guarantee of solvency. Where there are serious indications of overindebtedness, the statutory procedure must be followed without delay and the required professional validations obtained.
Frequently asked questions
Are interim accounts mandatory?
Not as a general, periodic requirement for every SME. Management must nevertheless have an accounting organization and sufficient information to monitor solvency and fulfill its duties. Where there are reasonable grounds to believe that the company is overindebted, the interim accounts provided for in Article 725b CO become mandatory.
Is a trial balance sufficient?
Rarely for an important decision. The trial balance shows recorded entries, but not necessarily missing invoices, work in progress, impaired receivables, depreciation, accrued expenses or taxes requiring provision. These adjustments can substantially alter profit.
What is the best date for preparing interim accounts?
A month-end or quarter-end makes reconciliations easier. The right time mainly depends on the company’s calendar: seasonality, tax deadlines, investments, bank negotiations, general meetings or cash flow pressure. Choose a date that still leaves time to correct variances.
Should they be as precise as the annual financial statements?
No, unless a particular purpose or legal requirement calls for it. Management accounts may use reasonable estimates and an appropriate materiality threshold, provided the main risks are covered and the methods remain consistent. The more irreversible the decision, the greater the precision and documentation required.
Why add a cash flow forecast?
Because profit does not guarantee the ability to pay wages, VAT or suppliers when due. The forecast translates the balance sheet and profit into a schedule of receipts and payments, identifying when a cash shortfall might arise.
Official sources
- Code of Obligations, in particular Articles 716a, 725–725b, 810, 820 and 957–958f
- SECO SME portal — Accounting planning
- SECO SME portal — How to plan your liquidity effectively
- Federal Tax Administration — VAT audit procedures and turnover reconciliation
Last legal review: September 2, 2026.
Disclaimer
This publication is provided for information only and does not constitute individualized legal, tax, accounting or financial advice. Each situation must be assessed in light of its specific circumstances and the law applicable at the time of the decision.
For further information, please consult our Legal notice and disclaimer.
