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Cash book › Cash book format
Cash book format: what to write and how the balance works
A cash book is the list of every rupee that comes into and goes out of the cash drawer, in date order, with the balance after each entry. It is the oldest book of accounts and still the most useful one: the balance it shows should match the cash you can count.
The columns
- Date of the entry.
- Particulars: what it was and who it was with, for example "Cash memo CM/26-27/041 · walk-in customer" or "Rent · Mr Arora".
- Reference: bill, receipt or voucher number.
- In (Receipts): cash that came in.
- Out (Payments): cash that went out.
- Balance: the cash that should be in the drawer after this entry.
The book starts with the opening balance (the cash counted on the first day) and ends with the closing balance: opening + receipts − payments.
A week in the cash book
| Date | Particulars | In (₹) | Out (₹) | Balance (₹) |
|---|---|---|---|---|
| 02 Nov 2026 | Opening balance | 8,500.00 | ||
| 02 Nov 2026 | Cash sales (cash memos) | 14,200.00 | 22,700.00 | |
| 03 Nov 2026 | Tempo hire | 1,200.00 | 21,500.00 | |
| 04 Nov 2026 | Received from Gill Traders | 6,000.00 | 27,500.00 | |
| 05 Nov 2026 | Cash deposited in bank | 20,000.00 | 7,500.00 | |
| 06 Nov 2026 | Tea and snacks | 350.00 | 7,150.00 | |
| Closing balance | 20,200.00 | 21,550.00 | 7,150.00 | |
8,500 + 20,200 − 21,550 = 7,150. At the end of 6 November the drawer should hold ₹7,150. The ₹20,000 taken to the bank leaves the cash book and appears as money in the bank book on the same day.
Cash book and bank book
Keep the two apart. Cash notes and coins go in the cash book; UPI, card, NEFT and cheques that have cleared go in the bank book. Many shops get most of their money by UPI now, so the bank book is often the busier one. Moving money between them (a deposit or withdrawal) is a contra entry: it changes where the money is, not how much you have.
Habits that keep it right
- Count the cash every evening and compare it with the book. A difference means an entry is missing or wrong; find it the same day.
- Never let the balance go below zero. You cannot pay out cash you do not have, so a minus balance is always a missing receipt or a wrong amount.
- Keep personal money out. If you take cash home, write it as drawings; if you put your own money in, write it as capital brought in. Ask your accountant how to show them.
- Keep the papers behind each entry: cash memos, receipts and vouchers. For GST, books and records are kept for 72 months from the due date of that year’s annual return.