Guides · Bookkeeping
The cash book, explained
The cash book is one of the oldest tools in bookkeeping: a running record of money received and money paid out. Kept current, it tells a business exactly how much cash it actually has.
What a cash book records
A cash book lists receipts on one side and payments on the other, each with a date and a description, so the balance at any moment is the running difference. It captures the actual movement of money, not promises of it.
Because it records cash as it moves, the cash book is the reality check against which invoices and dues are measured.
Cash book versus bank statement
A cash book is the business's own record; a bank statement is the bank's. They should agree, but timing differences — a cheque written but not yet cleared — mean they often differ until reconciled.
Comparing the two is bank reconciliation, and a well-kept cash book is what makes that comparison quick rather than painful.
How Lekha keeps money movement recorded
Lekha records payments and receipts against the bills they relate to, so the movement of money is tied to the invoices and payables it settles rather than floating loose.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is a cash book?
- A running record of money received and money paid out, with dates and descriptions, so the balance at any point is the difference between the two.
- How is a cash book different from a bank statement?
- A cash book is the business's own record; a bank statement is the bank's. They should agree once timing differences are reconciled.
- Why keep a cash book current?
- Because it shows the actual cash a business holds, which is the reality check against invoices raised and dues owed.