Tracking Your Incoming Cash

When money comes into your company, it's called cash receipts. When you do your bookkeeping, you record that incoming money in your cash receipts journal. This special journal is set up to make your job as easy as possible and to keep you from writing the same things over and over. Although the transactions may vary throughout the day, one thing will always remain constant: the debit account will always be cash.

The most common sources of incoming cash will be sales and accounts receivable collections. These accounts, along with sales tax payable, get dedicated columns in your cash receipts journal. There also will be other circumstances, though they may be rare, in which cash will come into the company from other sources. Those sources could include things such as:

  • Owner contributions

  • Loan proceeds

  • Rebates or refunds

  • Interest or dividends (from investments)

  • Return of security deposits

These transactions don't occur often enough to merit their own columns; instead, the credit side of the transaction falls into the miscellaneous column. When you get to the end of a page, foot each column. Next, add the debit totals together; then add the credit totals together. When total debits prove equal to total credits, you know your journal is in balance. Then you can proceed to posting the transactions to the general ledger accounts. In addition, accounts receivable collections need to be posted to the individual customer accounts in the customer ledger.

To make your bookkeeping job as simple as possible, make sure that every transaction in your cash receipts journal corresponds to a bank deposit slip. That does not mean you can't combine multiple transactions on a single deposit slip (though tracking is much easier when you do). If you want to use some of the cash from the daily receipts, write a check or get a withdrawal from the ATM rather than pinching it from your deposit. It may seem like a lot of bother at the time, but later on, when you're trying to figure out why your cash seems out of whack, you'll be happy you did it that way.

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