What Is a Cashbook, and How Will It Help My Small Business?

Make your small business work! 

Finances are a critical part of running a business -- understanding finances is also a key skill in everyday life! This article, from Paychex.com, will explain how you can set up a cashbook to track the cash flow of your small business. Basically, a cashbook is an expansion of your daily cash transactions, including a record of all receipts and cash disbursements. 

P.s. Keeping records of your transactions is good for your personal life, as well as business! It lets you know where your money is going, so you can be a smarter spender! 

Keep track of transactions! 

A cashbook, or cash journal, records all of your business transactions! Similar to a checkbook register, it tracks the daily cash receipts and disbursements of your small business. It's useful in case of an error or a question about your business finances. With a detailed record, you are able to analyze how your cash is flowing in and out.

 Image source:  http://www.lowcards.com/debit-card-swipe-fees-dropped-dramatically-10496

Image source:  http://www.lowcards.com/debit-card-swipe-fees-dropped-dramatically-10496

Set it up! 

One page of a cash book = one month of activity (unless you do a lot more transactions!)

The first line lists the beginning cash balance. As transactions are recorded, the cash account is affected by either cash disbursements or receipts.

Cash receipts - money flowing into the company

Examples include: 

  • Customer payments
  • Interest paid on accounts at your financial institution

These transactions are recorded as DEBITS in the cashbook because they increase the cash account. (This equals an increase in "Assets" on your business balance sheet.)

Cash disbursements - money flowing out of the company

Examples include: 

  • Bill Payments
  • Debt Payments
  • On Company Loans
  • Purchases for the Company

Disbursements are documented as CREDITS because they decrease the cash account.

See how different transactions can cause an increase (debit) or decrease (credit) to the cash balance.

Portability of cash transaction reporting

Of course, there are apps that can help you keep track of business accounting. While helping to simplify the process, keeping your own detailed records will ensure that you are properly tracking your business transactions!

Choose a format that works for you! 

There are many ways to track your business transactions, so choose the method that works best for you and your business. If you are new to this, you can always ask to speak with a financial advisor or a loan officer at your credit union! 

Stay inspired!! 



Visit Paycheck.com for more information about small business accounting and finance!