How Much Cash Should a Swiss SME Keep? A Simple CHF Buffer Plan

Profitable companies run out of cash all the time.

Not because the business is bad, but because the money leaves at different times than it arrives. A VAT payment falls due right after a slow quarter. The 13th salary lands in December, together with year-end bills. A big client pays 60 days late.

The answer isn't a complicated treasury department. It's a simple plan for how much cash you keep, where, and for what. Here's one that works for most Swiss SMEs.

Why this matters (beyond sleeping well)

For a Swiss AG, the board of directors is legally required to monitor the company's solvency and, if insolvency threatens, to act with due speed: secure liquidity, restructure or take further steps (OR Art. 725). For a GmbH, the same duty applies to the managing directors (OR Art. 820).

"We didn't see it coming" isn't a great position. A simple cash plan is how you see it coming.

The three-bucket plan

Split your company's cash into three buckets. They can be separate balances, or just lines in a spreadsheet.

Bucket 1: Operating cash

Money for this month's payments: salaries, rent, suppliers, software.

Rule of thumb: one month of outgoing payments, topped up as revenue comes in.

Bucket 2: Reserved cash (money that isn't really yours)

Money you've already collected but will have to pay out:

• VAT you've charged customers. It belongs to the ESTV; you're holding it until the return is due.
• Social-insurance contributions for the current period (AHV/IV/EO, ALV, family allowances, accident insurance, pension fund).
• Tax at source (Quellensteuer) you've deducted from employees' salaries, if it applies.
• Income and profit taxes for the current year.
• Known big bills: the 13th salary, annual insurance premiums, a planned dividend and its 35% withholding tax.

Rule: move a set percentage of each incoming payment into this bucket as it arrives, so the money is there on the due date.

Bucket 3: Safety buffer

Money for the unexpected: a client who pays late, a lost contract, a broken machine, a slow quarter.

Rule of thumb: many SMEs aim for two to six months of fixed costs, depending on how predictable their revenue is. A company with a few large clients needs more than one with thousands of small ones. How you split working capital and reserves is a decision for your own risk policy and adviser.

The Swiss payment calendar to plan around

These are the recurring dates that most often catch Swiss SMEs short:

• VAT — When: Within 60 days after the end of each settlement period: usually quarterly (effective method) or half-yearly (net tax rate method). With annual settlement, instalments are due during the year and the balance by end of February; Source: MWSTG Art. 35 and 86
• AHV contributions (on account) — When: Monthly if your annual wage bill is above CHF 200,000, otherwise quarterly; due within 10 days after the period ends. Very small employers can be allowed longer periods; Source: AHVV Art. 34
• AHV salary declaration — When: By 30 January for the previous year, followed by the final bill; Source: AHVV Art. 36
• Pension fund (BVG) — When: As set by your pension fund, often monthly or quarterly; Source: Your affiliation contract
• Income and profit taxes — When: Provisional instalments and final bills set by your canton; Source: Your cantonal tax office
• 13th salary — When: Usually with the November or December salary, if the employment contract provides for it; Source: Employment contracts
• Withholding tax on dividends — When: Within 30 days after the dividend falls due; Source: VStG; ESTV

Put these dates into a 12-month cash forecast with your expected revenue. The months where outgoing payments cluster (often December, January and the VAT months) are where the buffer earns its keep.

More on dividends: Paying Dividends from a Swiss GmbH or AG: 35% Withholding Tax in Plain English. More on social insurance: Hiring Your First Employee in Switzerland: The AHV Setup to Do Before Payday One.

A buffer in every currency you spend

If you have costs in EUR or USD, keep a small operating buffer in those currencies too, so you're not forced to convert CHF at a bad moment to pay a supplier tomorrow. The same three-bucket logic applies per currency, just smaller.

See The Strong Franc and Your SME: Currency Risk Basics for Swiss Companies for how to decide what to hold and what to convert.

Where to keep the buckets

A few principles, not recommendations:

• Know what each balance legally is. A bank deposit, a claim on a provider, a token? Depositor protection (esisuisse) covers deposits at authorised Swiss banks and securities firms up to CHF 100,000 per client and institution, and companies count as clients. Other types of balances aren't covered. See "Is My Money Protected?" Questions to Ask Any Business Account Provider.
• Consider concentration. If all your cash sits with one provider, that provider's risk is your company's risk.
• Keep operating cash where you pay from. Bills, salaries and taxes should be payable without a transfer first.
• Match liquidity to the bucket. Operating and reserved cash should be available immediately. Only the part of the buffer you won't need soon could be placed elsewhere, and that's an investment decision for your board and adviser.

A monthly 20-minute treasury routine

1. Update the 12-month forecast with actual numbers.
2. Top up the reserved bucket for VAT, social insurance and taxes.
3. Check the buffer against your target in months of fixed costs.
4. Chase late receivables. Late payers are a cash problem before they're an accounting problem.
5. Convert currencies by rule, not on the day you're short.
6. Send the summary with the month-end pack: The Month-End Pack Your Treuhänder Actually Wants.

A worked example (hypothetical)

A Fribourg architecture GmbH with eight employees has fixed costs of about CHF 110,000 a month and fairly lumpy project revenue.

• Operating: CHF 120,000, about one month of payments.
• Reserved: 7.5% of every incoming payment (the VAT share of a gross amount at 8.1%) goes to a VAT reserve and a set amount to social insurance and taxes. The 13th salary (about CHF 70,000) is reserved at about CHF 5,800 a month through the year, so it's fully covered by November.
• Buffer: target four months of fixed costs, CHF 440,000, built up over two years from profits.
• EUR: the firm pays some German consultants, so it keeps a EUR 20,000 operating buffer.
• December check: the forecast shows the 13th salary, the Q4 pension contribution and a provisional tax instalment all landing in the same weeks. Because they were reserved, nothing has to be delayed.

Common mistakes

1. Treating VAT collected as revenue. It's the ESTV's money in your account.
2. Forgetting the 13th salary in the December forecast.
3. Planning by the bank balance, not by a forecast.
4. One currency buffer for multi-currency costs.
5. Never writing down the target, so the buffer quietly gets spent.

Bottom line

Three buckets, one calendar, one monthly routine. Know what's yours to spend, set aside what isn't, and keep a buffer sized for your business, not someone else's rule.

FAQ

How much cash should a small Swiss company keep?

Many SMEs aim for one month of payments as operating cash, plus reserves for VAT, social insurance and taxes, plus a safety buffer of two to six months of fixed costs. The right level depends on your revenue stability and risk policy.

When is Swiss VAT paid?

Within 60 days after the end of each settlement period, usually quarterly under the effective method or half-yearly under the net tax rate method (MWSTG Art. 86). Since 2025, businesses with turnover up to CHF 5,005,000 can apply to settle annually, paying instalments during the year and the balance by end of February (MWSTG Art. 35).

How often are AHV contributions paid?

On account, monthly if your annual wage bill exceeds CHF 200,000, otherwise quarterly, within 10 days after the period ends (AHVV Art. 34).

Is a company's cash protected by esisuisse?

Deposits at authorised Swiss banks and securities firms are protected up to CHF 100,000 per client and institution, and companies count as clients. Balances that aren't bank deposits aren't covered.

Does the board have to monitor liquidity?

Yes. The board of an AG must monitor the company's solvency and act if insolvency threatens (OR Art. 725). For a GmbH, the managing directors have the same duty (OR Art. 820).

Keep operating cash where you pay from

With Firma, your company holds balances in CHF, EUR, USD and more in its own name, and makes salary transfers, supplier payments and Swiss QR-bill payments from the same place. There's no minimum balance, and monthly statements help you reconcile your accounts. Your Firma balance is digital stablecoin tokens, not a bank deposit, and we tell you that up front. Money in is free. Every outgoing payment carries the plan fee (25 bps on Plus, 20 bps on Platform, custom on Enterprise), shown before you send. Conversions use the Reuters rate, and if an incoming payment is converted, there's no spread. Plus is Fr. 499 a month. Verification takes about two days, and if we can't verify your company, there's nothing to pay.

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Year one? Read 7 Money Mistakes Swiss Founders Make in Year One. Comparing providers? Use Traditional Bank vs Fintech Business Account: A Swiss Founder's Checklist.

This article is general information, not legal, tax, or investment advice. Talk to a qualified adviser about your situation.

Firma is not a bank and is not licensed by FINMA. Firma Operations AG is a member of VQF, a FINMA-recognised self-regulatory organisation for anti-money-laundering, and does not hold client funds. Fiat payments are processed through partner banks. Balances are digital stablecoin tokens, not bank deposits, and are not covered by esisuisse.

Sources: Swiss Code of Obligations, Art. 725 and 820; VAT Act (MWSTG), Art. 35 and 86; ESTV, paying VAT; ESTV, annual VAT settlement; AHV Ordinance (AHVV) Art. 34; Federal Compensation Office, salary declaration; FINMA, depositor protection; ESTV, withholding tax; Firma.