One of the easiest ways to record cash transactions is by using a cash book. A cash book can record the transactions of both cash and the bank.
We will look at the different cash book types, including single column, double column, single entry and double entry. We will also look at the advantages of using an accounting package for your cash book.
What is a cash book?
If you run a small charity, the chances are that it is using a single column cashbook. It will have columns to record the transactions of both income and expenditure. It is part of the ledgers of a charity or business.
There are several different ways of setting one up; including paper-based, excel spreadsheet or purchasing a book from a stationery supplier like Amazon.
If you are using accounting software, the transactions you post to the accounts will record in the cash and bank, and therefore a manual record is not required.
Single Entry Cash Book
A single entry system is in it’s simplest form and you can either purchase one from a retailer or create it in Excel. It will show income on one side and expenditure on the other. Each side will have several columns; these include date, details, reference and amount. A simple example is below.
Double Entry Cash Book
A double entry cash book is more advance and includes analysis of the income or expenditure. An example of this is a business that wants to record what category the payment is, so may add columns for rent, wages, utilities, general expenses and others. It is also the same for sales; the business may sell different types of services or goods.
Here is an example of double entry.
Excel Cash Book Template
We have developed our own Excel Cash Book Template that is used by lots of small businesses and charities. All our templates are easy to use, free to download and no login or email required. We have two spreadsheets a standard version for small businesses and an extended version for companies which need either more rows or account codes.
Below is a table showing the difference between the two templates.
|Cash Book||Standard Version||Extended Version|
Petty Cash Template
If a business uses petty cash, we have developed a petty cash log. It will keep track of all the money separate to the bank account. The template includes columns for different expenditure codes. It is useful if you are using petty cash and accounting software, as you can post the totals to the correct expenditure codes.
Accounting Cash Book
The simplest way to record the transactions is by using accounting software. There are lots of different packages available most of which are online and will grow with the business. Packages include Xero, QuickBooks, Sage and a free one called Pandle.
The advantage of using accounting software is that as you record each transaction, the bank and cash are automatically updated. An example of this is business completes a consultancy job for a client. The client pays immediately by bank transfer. A sales invoice is issued recording the payment received. The accounting software will post to both the bank and sales accounts.
Cash Book Format
When designing an Excel template, it is vital to get the format correct. On the left is the income and expenditure on the right-hand side. Both sides will have columns for date, description, reference and amount. At the bottom of the spreadsheet will have totals and a carried forward balance.
For paper-based format, you may find it easier to have the following columns: date, description, reference, income, expenditure and balance. It allows for a running balance of the bank and ensures that there are no mistakes in the figures.
Below is an example of a paper-based cash book using a standard A4 lined pad.
Double Column Cash Book
So far we have looked at the single column cash book, but there are a couple of other versions, the are double and triple column.
The double-column is for recording both cash and bank. On the left, it shows income for both cash and bank, and the right shows the expenditure for both.
Triple Column Cash Book
A triple column cashbook (also known as three-column) includes cash, bank and an additional column for discounts. The discounts are for both received and given.