Checklist of How To Use a Cashbook

  1. Give yourself space. Buy a bigger book than you expect you’ll need. A 14 or 16-column cashbook is best. This is particularly important in your first year of business, when your income and expenses may not be as expected.

  2. Leave a couple of pages at the back of the cashbook for your monthly bank reconciliations.

  3. Start each month on a new page.

  4. Choose expense and income titles in your cashbook that are relevant and common to your business.

  5. Make sure you write in the check number for expenses. This makes it easy to check your entries against the bank statement.

  6. Unusual items can be put into a “sundry” column—this is especially useful for one-off payments and receipts. It’s a good idea to give these items a written description in the reference column or near the sundry amount for easier identification.

  7. If you are Sales tax-registered, set up separate columns for Sales Tax paid on purchases and expenses and Sales Tax received from sales and income. Remember, the totals in your expense and income columns will be the amount banked less the Sales Tax portion.

  8. Remember, if you are registered, add Sales Tax to the selling price of your goods and services.

  9. To separate the Sales Tax portion from your purchases and expenses, and sales and income, divide the amount by nine.

  10. Some items don’t include Sales Tax , such as wages, bank fees and interest.

  11. Add up all columns at the end of the month, ensuring all other total columns equal the bank column total.

  12. Reconcile the cashbook with your business’s bank statement each month.

  13. Make sure you rule off each tax year.

Return to 'Checklist' menu


Back to Menu