A cash book is a part of accounting and provides for the recording of cash income and expenses. These are listed consecutively in the cash book. It is important to have insight into the financial situation of your company. By keeping a cash book, you know exactly what the incoming and outgoing cash flows are. Not every company has transactions with an invoice, and for cash that comes in and goes out, it is important to maintain cash administration.
Maintaining a Cash Book
A cash book can essentially be seen as the accounting for cash. However, it is also possible to include small card expenses for which there is no invoice in this administration. It is important to keep the cash administration accurately. If this is not done, it is difficult to trace later where the money came from or where it was spent. Moreover, the cash book must be traceable and accurate for each day. It is advisable to give each cash entry a consecutive number when maintaining the cash administration. Refer to the relevant cash transaction that has taken place.
Is a Cash Book Mandatory?
A cash book is mandatory for companies if there are cash income and expenses. A company like a store, for example, can still accept cash in addition to card payments. There are also companies that offer customers the opportunity or even have a preference for being paid in cash. Companies that work exclusively on an invoice basis, have no cash on hand, and do not receive or pay with cash are not required to maintain a cash administration. In that case, it is important to keep a bank book with the transactions that go through the business account.
A Digital Cash Administration or on Paper?
It is recommended to use a digital cash book instead of maintaining the cash administration on paper. A cash register system, for example, can be linked to a digital cash book, but not to the paper cash administration. Moreover, the risk of making a mistake with a paper administration is much greater than with a digital cash book.
An Online Cash Book
It is possible for an entrepreneur 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 is directly part of the complete accounting. This is convenient because all data for the VAT return, for example, can be retrieved at the touch of a button. This way, it is prevented that the VAT return is sent too late.
Keeping All Receipts
To keep a cash book accurate, it is important to keep all receipts well. This includes both income and expenses. It is therefore handy and efficient to link a cash register system to the online cash book. It is further recommended to maintain the cash book on a daily basis to keep this administration always up-to-date.
