How to keep a simple cash book for a club

What a cash book is

A cash book records money that has actually moved: money that came in (receipts) and money that went out (payments). It does not record money that someone still owes the club, or bills the club has not paid yet. That keeps it simple enough for a volunteer with no bookkeeping training.

Most small clubs hold money in two places: a cash tin and a bank account. A cash book keeps a separate balance for each, so that at any time you can count the tin and read the bank statement and see whether the book agrees with them.

For background on the wider subject, see the Wikipedia article on bookkeeping.

What to write down for each entry

Every time money comes in or goes out, write one line with these seven things:

1. The date the money was received or paid.
2. What it was for, in a few plain words: "Members' subscriptions, January" or "Village hall, winter term".
3. A category, such as Subscriptions, Donations, Hall hire or Insurance. Categories are what let you show totals by type at the end of the year.
4. Money in or money out.
5. The amount, in full, with pence or cents.
6. Cash or bank: did it go into or out of the tin, or the bank account?
7. A receipt or cheque number, if there is one, so the line can be matched to a piece of paper.

Write the entry on the day, or as soon after as you can. Entries written from memory weeks later are where most mistakes start.

Choosing categories

Use a short list and keep to it all year. Ten is plenty for most clubs. The cash book on this site starts with these ten, and you can change them:

• Money in: Subscriptions, Donations, Fundraising, Grants
• Money out: Hall hire, Equipment, Insurance, Events, Bank charges
• Either: Other

If "Other" grows large, that is a sign one more category is needed. Members reading the annual report will ask what was in it.

Keeping cash and bank apart

When you take cash from the tin to the bank, the club has not received or spent anything: the money has only changed place. Record it as two lines on the same day, one for money out of cash and one for money into the bank, with the same amount and a description such as "Cash paid into bank". Give both lines the same category so that they are easy to find and explain. That category will then show the same amount under money in and under money out, and the two cancel out.

Never pay a bill out of cash you have just collected without writing down both the receipt and the payment. Record the full amount collected as money in, then the bill as money out.

Checking that the book adds up

One sum checks the whole book, and it works separately for cash and for bank:

Opening balance + receipts - payments = closing balance

• Cash: count the tin. The amount in it should equal the cash balance in the book.
• Bank: compare the book with the bank statement, line by line. Differences are usually cheques not yet cashed, bank charges not yet written in the book, or an amount typed wrongly. Wikipedia has a short explanation of bank reconciliation.

Do this once a month. A difference found in the same month takes minutes to trace. A difference found at the end of the year can take days.

Keeping the paperwork

• Keep every receipt, invoice and bank statement, in date order, with the receipt number written on it.
• Give a written receipt for cash you are handed, and keep a copy.
• How long records must be kept depends on your organisation's rules and on local requirements, so check both before throwing anything away.