A ‘cash book’ is an essential part of the business financial records. It contains a log of money coming in and going out.
As the name ‘cash‘ suggested it refers to cash transactions as opposed to electronic/bank transactions.
The word ‘book’ is used, as prior to technological advances, all records were kept in the form of handwritten ledgers or books.
The two main types of cash book are:
General cash book, which details all cash transactions. All cash received and all spent.
Petty cash book, which is a log of a small amount of cash kept on site, also referred to as the ‘float’. This is often used to buy small items such as stamps and stationary.
Both cash books can be kept or record all information within the general cash book to keep things simple.
It is a legal requirement to keep a record of receipts and payments of money.
A cash book helps to identify what is ‘cash in hand’ and can be used to help identify errors.
They can be designed to suit specific needs, being simple or more complex, with multiple subheadings.
If the cash book is not giving the results or if it seems overly complex, speak to a bookkeeper or accountant about how to tailor a cash book to work best.