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How To Maintain Cash Book?

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Deborah Mann answered
It does not matter whether you use a physical book or a computer spreadsheet as your cash book because either system is as effective as the other. What's important is that you make sure that you keep track of all the information that is relevant.

  • What to include

Your cashbook should keep track of all receipts and payments. It should tell you how much money has been received; where it came from; what money has been paid out including who it was given to and what for; the total for the month or year for regular payments such as loan repayments or rent; the total for the month or year for all payments, both income and expenses; and finally, your current balance.

  • How to set out your cash book

To make sure that your cash book works properly, make sure that there are enough columns for everything. This is easy on a computer spreadsheet because you can add them when and if you need them.

If you use a book, then 16 columns usually suffice.

Use a new page for each week or month and use different columns for expenses that are regular so that you can see them easily, and so that they are differentiated from your other expenses.

If you use checks, make sure that you also record the number so that you can reconcile your bank statements easily.

Make sure that your subtotals add up correctly, for example that your overall balance is the total of all that has gone out and come in. If this does not balance then you need to go over your figures and see where the discrepancy lies otherwise there will be a knock on effect that will build up.

The secret to keeping a cash book is make sure that you keep it up to date.

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