How to use it
- 1On the first row, enter the bank balance you're starting from as money in, with the category Opening balance.
- 2Add every payment in and out in date order, with a reference such as the invoice or receipt number.
- 3Choose a category for each line so the year's totals can be split for your accounts.
- 4When the bank statement arrives, mark each matching line Yes in Reconciled. The balance on the last ticked line should equal the statement.
- 5Keep the receipts, invoices and statements behind the lines: the cash book records them, it doesn't replace them.
What each field means
- Date
- The date the money left or reached the account.
- Description
- Who paid or was paid, and what for.
- Reference
- Invoice, receipt or cheque number, to find the proof.
- Category
- What kind of receipt or payment it is. Opening balance is excluded from income.
- Money in and Money out
- One or the other on each line.
- Balance
- The running balance after the line.
- Reconciled
- Yes once the line has been matched to the statement.
What the records have to show
If you're self-employed, GOV.UK says to keep records of all sales and income and all business expenses, and to be able to identify business transactions. Receipts, bank statements, sales invoices and till rolls are the proof.
A limited company must keep records of all money it receives and spends, plus its assets, debts and stock, for 6 years from the end of the financial year they relate to. HMRC can fine a company up to a fixed amount for not keeping them, and directors can be disqualified.
Reconciling to the bank
The point of a cash book is that its balance agrees with the bank. Any difference is a missing line, a duplicate or a typing error, and it's far easier to find one month at a time than at the year end.
Licence and disclaimer
Free to use, copy and adapt for your own business or personal records. Please don't resell it or republish it as your own template.
A template is a starting point, not advice for your circumstances. Check the result against the GOV.UK guidance linked below, or ask an accountant.
Related
What else will you need?
- TemplatePetty cash logA petty cash log records every top-up to a business's cash float and every small payment made from it, with a voucher number and a running balance.PDFExcel
- TemplateInvoice registerAn invoice register lists every invoice a business issues, with its unique number, customer, amounts, due date and what has been paid.Excel
- TemplateSole trader income and expenses trackerA sole trader income and expenses tracker records every sale and business cost through the tax year, so the self-employment pages of your tax return come straight from the totals.PDFExcel
- ChecklistLimited company year-end checklistAt a limited company's year end, reconcile every bank and loan account, list unpaid invoices and bills, count stock, record asset purchases, review the director's loan account and check dividends were minuted.
Rather we did it?
Countify can handle this for you, for a fixed fee agreed upfront.
Questions
Frequently asked questions.
Do I still need a cash book if I use accounting software?
No. Bookkeeping software keeps the same record from your bank feed. The cash book is for businesses keeping records by hand or in a spreadsheet.
Can I use one cash book for cash and bank?
It's clearer to keep one per account, so each balance can be checked against its statement. Use the petty cash log for notes and coins.
How long do I keep the cash book?
Sole traders: at least 5 years after the 31 January deadline for the tax year. Limited companies: 6 years from the end of the financial year, or longer in some cases.
Checked against GOV.UK on · Reviewed by Kamran Ishaq FCCA, Founder & CEO, on .
Sources: Business records if you're self-employed: what records to keep (opens in a new tab) (HM Revenue & Customs); Business records if you're self-employed: how long to keep them (opens in a new tab) (HM Revenue & Customs); Running a limited company: company and accounting records (opens in a new tab) (HM Revenue & Customs).