What is a cash book?

A cash book is a part of accounting and provides for keeping track of cash income and expenditure. These are recorded consecutively in the cash book. If you are an entrepreneur, it is essential to have insight into the financial situation of the company. By keeping a cash book, you know exactly what the incoming and outgoing cash flows are, among other things. Not every company has transactions with an invoice, and for cash incoming and outgoing, it is important to keep a cash book.

Keeping a cash book

A cash book can basically be seen as the bookkeeping for cash money. However, it is also possible to include small pin expenses for which there is no invoice in this administration. It is critical to keep the cash administration accurate. If this is not done, it will later be difficult to trace exactly where the money came from or what it was spent on. Moreover, the cash book for each day must be traceable and accurate. It is advisable to give each cash entry a consecutive number when keeping the cash book. Referring to the cash transaction that took place.

Is a cash book obligatory?

A cash book is mandatory for companies in any case where there is income and expenditure with cash. A business like a shop, for example, can accept cash payments in addition to debit card payments. There are also companies that offer customers the opportunity or even a preference to be paid in cash. Businesses that work exclusively on an invoice basis, do not receive or pay with cash, are not obliged to keep a cash administration. In that case, however, it is important to keep a bank book of the transactions that go through the business account.

Cash administration digital or on paper

It is recommended to use a digital cash book instead of keeping the cash administration on paper. For example, a cash register system can be linked to a digital cash book, but not to the paper cash book. Moreover, the risk of making a mistake with a paper administration is much greater than with a digital cash book.

Online cash book

As an entrepreneur, it is possible to set up a cash book administration in Excel, but an online cash book as part of accounting software is much more efficient. The chance of errors is smaller and, moreover, the cash administration forms an immediate part of the complete bookkeeping system. This is handy because all the data for the VAT return, for example, is revealed at the push of a button.

Keep all receipts

In order to keep an accurate cash book, it is important to keep all receipts. So both of the income and expenditure. It is therefore convenient and efficient to link a cash register system to the online cash book. It is also advisable to keep the cash book up to date on a daily basis to ensure that the administration is always up-to-date.