A cash book is a simple bookkeeping record used to track all money coming into and leaving a business. It records cash and bank receipts and payments in date order, giving you a clear picture of where your money comes from and how it is spent.
To make this easy, we provide a free Excel cash book template you can use to enter your own transactions.
In many small businesses, the cash book acts as both a daily record and a summary of cash and bank activity. When kept up to date, it helps you stay organised, spot errors early, and prepare accurate accounts and tax information.
We will explore various types of cash books, such as single-column, double-column, single-entry, and double entry. Additionally, we will discuss the benefits of using an accounting package for your cash book entries and introduce our Free cash book template.
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What are cash books used for?
A cash book is used to:
- Record all cash and bank transactions in one place
- Keep track of your running cash and bank balances
- Provide evidence of income and expenses for accounts and HMRC
- Support reconciliation to the bank statements and error checking
- Managing cash flow more effectively
What is a cash book?
A cash book is a comprehensive record of the transactions in an accounting period, including receipts, payments, bank deposits, and withdrawals. It shows the transactions of both bank accounts and cash accounts.
Key features of a cash book:
- Cash Basis Accounting: Records when the cash is received or spent.
- Chronological Record: Transactions are recorded in order, providing a clear timeline of cash activities.
- Detailed Information: Each entry typically includes the date, transaction description, amount received or paid, and the account affected.
- Dual Purpose: It functions as a journal for initial recording and a ledger for maintaining the running balance of cash.
- Multiple Formats: Cash books can be single-column (cash only), double-column (cash and bank), or triple-column (cash, bank, and discount), depending on the complexity of the business’s transactions.
If you run a small charity or record personal transactions, you are likely to use a single-column cash book. It will have columns for both cash receipts and cash payments.
There are several ways to set one up, including paper-based, an Excel spreadsheet, or purchasing a book from a stationery supplier like Amazon.
Using accounting software for small businesses automatically posts transactions to the cash and bank accounts, eliminating the need for manual records. For small businesses, we recommend Sage UK, Xero or QuickBooks. If your business requires an accountant, our free tool can help you find one quickly.
Single Entry Cash Book Format
A single-entry system is, in its simplest form, and you can either purchase a book from a retailer or create it in Excel. It will show cash receipts on one side and cash payments on the other. Each side will have several columns: date, details, reference, and amount.
A simple example of a single-column cash book is below.
Double Entry Cash Book Format
A double entry cash book is more advanced and includes an analysis of the income or expenditure. It shows the bank adjustment and the income and expenditure analysis. For example, a business may want to record the payment category so it can add columns for rent, wages, utilities, general expenses, and others. It is also the same for sales; the business may sell different services or goods.
Here is an example of a double entry cash book.
Excel Cash Book Template
We have developed our Excel Cash Book Template, which many small businesses and charities use to track cash received and paid. All our templates are easy to use, free to download, and require no login or email. We have two spreadsheets: a standard version for small businesses and an extended version for companies that need more rows or account codes.
Below is a table showing the difference between the two cash book templates.
| Cash Book | Standard Version | Extended Version |
| Income Codes | 3 | 5 |
| Expense Codes | 8 | 13 |
| Transaction Lines | 40 | 95 |
| Charge | Free | Free |
Petty Cash Book Template
We have developed a petty cash log for a business that uses petty cash. It will keep track of all the money separate from the bank account. The template includes columns for different expenditure codes. It is helpful if you are using petty cash and accounting software, as you can post the totals to the correct expenditure codes.
Accounting Software
The simplest way to process transactions is by using accounting software. Many packages are available, most of which are online and scalable as the business grows. The packages include Xero, QuickBooks, and Sage UK.
The advantage of using accounting software is that the bank and cash balances are automatically updated in the general ledger as you enter each transaction, reducing human error.
Accounting Software Best Deals
Sage UK – 3 Months FREE + FREE plan for Sole-Traders, AI tools for bookkeeping automation
XERO – 90% Discount for 6 Months – Cloud accounting, unlimited users, smart bank feeds
QuickBooks – 90% Discount for 7 Months – Invoicing, expense tracking, payroll, financial reports
An example is a business completing a consultancy job for a client. A sales invoice is issued for a customer, including a payment link. The client pays immediately by bank transfer, and the payment is recorded in the software. The accounting software will complete the double entry and post it to the bank and sales accounts.
Cash Book Format
When designing an Excel template, it is vital to ensure the formatting is correct. On the left are the cash receipts, and on the right-hand side are the cash payments. Both sides will have columns for date, description, reference and amount. At the bottom of the spreadsheet, you will find totals and a carried-forward balance.
For a paper-based format, you may find it easier to have the following columns: date, description, reference, income, expenditure and balance. It allows you to record a bank’s running balance and ensures no mistakes in the figures when you complete a bank reconciliation.
Below is an example of a paper-based cash book using a standard A4 lined pad.
Accounting Software Best Deals
Sage UK – 3 Months FREE + FREE plan for Sole-Traders, AI tools for bookkeeping automation
XERO – 90% Discount for 6 Months – Cloud accounting, unlimited users, smart bank feeds
QuickBooks – 90% Discount for 7 Months – Invoicing, expense tracking, payroll, financial reports
Double Column Cash Book
So far, we have looked at the single-column cash book, but there are two other versions: the double- and triple-column cash books.
The double-column cash book shows both cash and bank transactions. The left shows income from cash and bank accounts, and the right shows expenditures for both.
Triple Column Cash Books
A triple-column cash book (also known as a three-column) includes cash, bank and an additional column for discounts. The discounts are for both received and given.
Below is the difference between the 3 different formats:
FAQ
Do I need a cash book for my small business?
If your business regularly receives or pays out money, a cash book is strongly recommended. It helps you keep track of cash and bank balances and provides clear records for accounts and tax purposes.
What’s the difference between a cash book and bank statements?
A bank statement shows what the bank has recorded. A cash book shows what you believe has happened. Differences between the two are identified during bank reconciliation.
Conclusion
Cash books are essential tools for tracking money. They provide a clear picture of income and expenses, helping you understand your spending habits and make informed financial decisions. Whether you prefer a traditional ledger or modern accounting software, maintaining accurate cash records is crucial for success in both personal and business finances.
