What Is a Cash Book? How It Works and Examples

A cash book records a business’s cash and bank transactions, helping you track money received, payments made and the available balance.

Written by

Angela Boxwell, MAAT

Experience

30+ years’ experience

Last updated

1st September 2026

A cash book provides a complete record of the money a business receives and pays. Each transaction is entered by date and allocated to the correct income or expense category.

Keeping the cash book up to date helps you monitor your available balance, manage cash flow and compare your records with your bank statements. You can maintain one on paper, in a spreadsheet or through accounting software.

This guide explains how a cash book works, the different types available and how to record daily transactions correctly. If you prefer to use Excel, we also provide free cash book templates for small businesses and self-employed people.

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Table of Contents

What is a cash book?

A cash book tracks all cash transactions a business receives and pays. Transactions are entered in date order and normally include the date, description, reference, amount and relevant income or expense category.

Despite its name, a cash book can record both physical cash and transactions made through a business bank account. Depending on the type used, it may contain separate columns for cash receipts, cash payments, bank transactions and discounts.

The cash book is a book of original entry because transactions are recorded there first. When properly maintained, it also shows the running cash and bank balances and provides the information needed for the general ledger, accounts, and tax returns.

Why businesses maintain a cash book

Businesses maintain a cash book to keep an organised, accurate record of daily income and expenses. It shows how much has been received, what has been paid and the balance available.

An up-to-date cash book helps a business:

monitor cash flow and avoid running short of money;
track income and expenses;
compare entries with bank statements;
identify missing transactions and errors;
prepare accounts and tax returns; and
make better financial decisions.

Recording daily transactions provides up-to-date records, supports cash management and helps the business monitor incoming and outgoing cash flows.

What is shown in a cash book?

A cash book includes all money received and paid through the business’s cash and bank accounts. Each transaction is entered on the date it occurs, creating a clear, accurate record of the business’s daily financial activities.

Cash transactions received may include:

Cash sales
customer payments
bank interest
loans received
money introduced by the business owner

Cash payments may include:

supplier bills including stock and general business expenses
rent and utilities
wages
travel costs
equipment purchases
money withdrawn by the owner

Each cash book entry normally shows the date, transaction details, reference, amount received or paid and the relevant income or expense category. Transfers between the cash and bank accounts should also be included so that both balances remain accurate.

How to record cash book entries

Start by gathering the bank statements, invoices, receipts, till records and petty cash vouchers for the period. These documents provide the information needed for each cash book entry.

Enter the date, description, reference and amount for every transaction. Record money received in the receipts column and money paid in the payments column, then allocate it to the correct income or expense category if used.

At the end of the period, enter the balance on the side needed to make the totals agree. Bring it forward on the opposite side at the start of the next period.

Update the cash book regularly and compare it with the bank balance. If cash is held, count it and check that it agrees with the balance shown.

Cash Book Format

Cash book formats vary, but each entry usually includes the date, description, reference and amount. The layout should make it easy to distinguish between money received and money paid.

An Excel cash book may show receipts on the left and payments on the right, with totals and a balance carried forward. Another common format uses a single table with separate columns for income, expenditure and the running balance.

A paper cash book can follow the same format using an accounting book or a standard lined pad. Whichever method you choose, the balance should be checked regularly against the bank statement by completing a bank reconciliation.

Below is an example of a paper-based cash book.

Types of cash book

The three main types are single-column, double-column and triple-column cash books. The best format depends on whether the business needs to record cash or bank only, both, or discounts as well.

Each type follows the same basic principles, but additional columns provide more detail about the transactions. The examples below show how each format works.

Single-column cash book

A single-column cash book is the simplest format. It has one amount column for money received and one for money spent, usually displayed on opposite sides of the page. Each entry also includes the date, description and reference.

In the example below, the business starts with a balance of 546.79 and receives a further 779.00 from customers. After spending 380.05, the closing balance carried forward is 945.74.

This format suits a small business that needs a basic record of income and expenses without separate analysis columns.

Double-column cash book

A double-column cash book has separate columns for the cash and bank. The income side shows money coming into the business, while the expenses side shows money going out.

This format allows for the cash and bank balances to be monitored separately. For example, cash received from a customer is entered in the cash column, while a supplier payment made by bank transfer is entered in the bank column.

When there is a transfer between cash and the bank account, record it on both sides of the cash book. This is known as a contra entry because it changes where the money is held without creating additional income or expenditure.

Example of a double column cash book, showing cash and bank

Three-column cash book

A three-column cash book has columns for cash, bank and discounts. The receipts side records discounts allowed to customers, while the payments side records discounts received from suppliers.

This format helps a business monitor its cash and bank balances while keeping a separate record of settlement discounts. Transfers between cash and the bank are entered as contra entries.

Using the example above, the business offers a 5% cash discount. The 3-column cash book will now look like this:

Example of a 3 column cash book showing discount, cash and bank

Paper, Excel or digital cash book

A paper cash book is inexpensive and easy to set up, but you must calculate totals and balances manually. Mistakes can also be harder to find and correct.

Excel can calculate totals and balances automatically while allowing you to divide income and expenses into categories. Our free cash book templates provide a ready-made format for recording transactions.

A digital cash book or accounting software can import bank transactions, store receipts and produce financial reports. It saves time but may involve a monthly fee and still requires transactions to be checked and categorised correctly.

The best option depends on the number of transactions, the level of detail required and whether the business must keep accurate digital records for VAT or Making Tax Digital.

Cash book and the general ledger

The cash book is a book of original entry because cash and bank transactions are first entered there. The figures are then used to update the relevant accounts in the general ledger, such as sales, rent, travel and other expenses.

In a double-entry system, the cash book may also act as the cash and bank accounts. This means only the corresponding entry needs to be posted to the appropriate general ledger account. Accounting software completes this process automatically when each transaction is categorised.

Free Excel cash book templates

Our free Excel cash book templates provide a ready-made format for recording income, expenses and bank transactions. The spreadsheets calculate totals automatically and divide transactions into useful accounting categories.

Different versions are available for small businesses and self-employed people, including an April-to-March cash book for the UK tax year.

Visit Excel Cash Book Template

FAQs

A properly maintained cash book is updated regularly using invoices, receipts and bank statements. Check the balance against the bank statement through a bank reconciliation and count any physical cash held. Investigate missing, duplicated or incorrectly categorised entries promptly.

A cash book records money received and paid, while accounting software manages a wider range of tasks, including invoicing, bank reconciliation, VAT and financial reports. A cash book may be enough for a small business with few transactions, but software can save time as the business grows or its reporting requirements increase.

The cash column cannot have a credit balance because a business cannot hold less than zero physical cash. However, the bank column can show a credit balance when the account is overdrawn. The overdraft is carried forward on the payments side of the cash book.

Summary

A cash book records the cash and bank transactions of a business. Keeping it updated helps monitor balances, manage cash flow and maintain accurate financial records. It can be maintained on paper, in Excel or through accounting software, depending on the needs of the business.

Free Excel Cash Book Templates
Bank Reconciliation
Petty Cash Book
Double-Entry Bookkeeping
General Ledger
Bookkeeping Basics