A financial record of all cash receipts and payments in a business
A cash book is a financial journal that records all cash and bank transactions of a business in chronological order. It tracks every rupee that comes in (receipts) and goes out (payments), providing a running balance of cash and bank funds available at any time. The cash book serves a dual purpose — it functions as both a journal for recording transactions and a ledger for the cash account. For Indian small businesses, a cash book is one of the most important financial records. It helps you monitor daily cash flow, detect discrepancies, prevent theft or mismanagement of funds, and prepare for bank reconciliation. Entries in a cash book include cash sales, cash purchases, payments to suppliers, receipts from customers, expense payments, bank deposits, and withdrawals. Under Indian tax law, businesses must maintain proper cash books as they form the basis for income tax assessment and GST audit verification.
Your electronics repair shop in Ahmedabad records in the cash book: Opening balance Rs. 15,000. Cash sales Rs. 8,500. Payment received from customer Rs. 12,000. Rent paid Rs. 6,000. Purchased spare parts Rs. 4,200. Electricity bill Rs. 1,800. Closing balance = Rs. 15,000 + Rs. 8,500 + Rs. 12,000 - Rs. 6,000 - Rs. 4,200 - Rs. 1,800 = Rs. 23,500.
A cash book records only cash and bank transactions (money in and money out), while a day book records all types of transactions including credit sales, credit purchases, and non-cash entries. The cash book is a subset of the day book.
No, when you use Stock Register, every cash transaction you record automatically updates the cash book. The app maintains the cash book for you in real time, so there is no need for a separate manual register.
Ideally, reconcile your cash book daily by comparing the book balance with actual cash in your drawer. For bank transactions, reconcile at least weekly. This helps catch errors, theft, or missed entries early.
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