Cash book is a record in which cash inflows and outflows of a company are fully and verifiably documented. It is a component of Financial accounting and is used for the ongoing recording of cash transactions.
Basics
The cash book records all cash movements, typically with the date, receipt number, amount, and a brief description. Each entry is based on a receipt that documents the business transaction.
The entry in the cash book is closely linked to the Account assignment and the Booking entry connected.
Legal framework
Cash movements must be recorded properly, completely and verifiably. The requirements for documentation, retention and verifiability apply regardless of whether a cash book is maintained on paper or electronically.
Note: timely recording and traceable documentation support compliance with GoBD.
Systematic classification
The cash book relates to the area of cash movements and supplements banking processes such as Bank transactions. Both are central components of ongoing accounting.
Cash management is also linked to debtor and creditor processes when payments are made in cash.
Typical components
- Cash account as a booking account
- Proof of payment (deposit or withdrawal voucher)
- Contra-account (e.g., expense, revenue, receivable, or payable)
- Current cash balance
Typical procedure
- Receipt capture
- Allocation to the business transaction
- Posting and accounting
- Cash matching
Practical relevance
A properly maintained cash book allows for transparent tracking of cash movements and supports the preparation of the Annual financial statement. electronic accounting system digital accounting to be.
Typical sources of error
- Missing or incomplete evidence
- Late recording of cash transactions
- Missing reconciliation of cash balance
- Unclear booking texts or allocations
FAQ
What is a cash book?
A record for the complete and traceable documentation of cash inflows and outflows.
Does the cash book have to be kept daily?
Cash movements should be recorded promptly and in a traceable manner.
How does it differ from bank statements?
The cash book documents cash movements; the bank book documents payment movements in bank accounts.
Conclusion
The cash book is a central component of financial accounting for the proper documentation of cash movements. It complements bank statements and supports reconciliation and closing work.
Brasser Accounting Solutions GmbH is a specialised accounting service provider and part of a corporate group with Quint GmbH (tax consultancy/auditing) and Service Place Årjäng AB (Swedish tax office). BAS exclusively performs services according to § 6 No. 3 and 4 StBerG and does not provide tax or legal advice.
