How to keep a daily cash book for a small shop or freelance work
A plain guide to keeping a daily cash book for a small shop, stall or freelance business. What columns to use, how to balance it each evening, a worked example, and the habits that keep it accurate.
By Virat Chauhan · · 6 min readA daily cash book is a simple record of all money coming in and going out of a business, written down the same day. Use columns for date, details, money in, money out and running balance. Start each day with the opening balance, record every sale and expense as it happens, and each evening count the cash and check it matches the book. Keep receipts with it and store your records for as long as your tax rules require.
Ask a small shop owner how the day went and they will often answer with a feeling. "Busy." "Slow." "Good, I think."
A daily cash book turns that feeling into a number. It is one of the oldest money tools there is, a page where every rupee, dollar, peso or euro that comes in or goes out is written down on the same day, and it still works well for small, cash-heavy businesses.
Here is how to keep one, whether you run a shop, a market stall, a home bakery, tutoring classes or freelance work.
What is a daily cash book?
A daily cash book is a record of all the money coming into and going out of your business, written down as it happens, with a running total.
It answers three questions at the end of every day:
- How much money came in?
- How much went out, and on what?
- How much should I have right now?
If you can answer those three every evening, you already know more about your business than many people who only look at their bank balance once a month.
What columns does a cash book need?
Five columns are enough to start:
| Date | Details | Money in | Money out | Balance |
|---|---|---|---|---|
- Date: the day of the entry.
- Details: what it was. "Sold 3 shirts", "Paid supplier", "Electricity bill", "Tutoring, Riya".
- Money in: sales and any money received.
- Money out: purchases, bills, wages and anything you paid.
- Balance: what you should have after that entry.
Two optional columns many people find useful:
- Payment type: cash, card, bank transfer or mobile wallet. This matters because cash in the drawer is only part of the story.
- Receipt number: so every entry can be matched to a slip of paper later.
How do I fill in a cash book each day?
The routine has three parts.
Morning: write the opening balance
The first line of the day is yesterday's closing balance. If yesterday's closing balance was 1,240, today starts at 1,240.
During the day: record every entry as it happens
Write each sale and each payment when it happens, not at night from memory. Small amounts are the ones that disappear: the tea for the delivery driver, the tape you bought next door, the change you gave a regular customer who will "pay tomorrow".
If you get very busy, keep a scrap of paper next to the till and copy it into the book in a quiet moment. The important thing is that nothing waits until evening.
Evening: balance and count
At closing time:
- Add up money in.
- Add up money out.
- Opening balance + money in - money out = closing balance.
- Count the actual cash and check the bank or wallet for non-cash payments.
- If the numbers match, write the closing balance and draw a line. If they do not, look for a missing entry now, while the day is fresh.
This takes five to ten minutes. It is the most valuable ten minutes of the day.
A worked example
Here is one day, 14 October, for a small clothes stall. The currency does not matter; the shape is the same everywhere.
| Details | In | Out | Balance |
|---|---|---|---|
| Opening balance | 1,240 | ||
| Sold 2 shirts (cash) | 600 | 1,840 | |
| Paid stall rent | 300 | 1,540 | |
| Sold 1 jacket (card) | 900 | 2,440 | |
| Bought bags and tape | 85 | 2,355 | |
| Sold 3 scarves (cash) | 450 | 2,805 | |
| Lunch for helper | 60 | 2,745 |
Closing balance: 2,745. The opening 1,240 was all cash and 900 came in by card, so the cash drawer should hold 1,845. Count it. If it holds 1,845, the day is done.
Why does the cash book not match?
It happens to everyone. The usual causes:
- A sale that was never written down, often during a rush.
- A small payment from the drawer, like a snack, a taxi or a tip.
- Change given wrong, in either direction.
- A card or wallet payment counted as cash, or the other way round.
- Personal money mixed with business money, which is the big one.
Find the gap the same evening if you can. A gap of 50 found today is a detail. The same gap found three weeks later is a mystery.
Habits that keep a cash book accurate
- Keep business and personal money apart. If you take money for yourself, write it down as "owner's drawings". It is not a loss, it is a record.
- Keep every receipt in an envelope or folder by month, numbered to match the book.
- Write in pen, never erase. If you make a mistake, cross it out with one line and write the correct entry below. That way the book stays trustworthy.
- Note money you are owed. If a customer will pay later, write it on a separate "to collect" page so it does not quietly vanish. The same idea works for friends, as we explained in how to keep track of money you lend.
- Review once a week. Which days were strongest? Which costs keep growing? Small changes start here.
How long should I keep my cash book?
Longer than you think. Tax rules decide this, and they vary by country. In the United States, the IRS generally asks people to keep records for three years, and longer in some situations, including at least four years for employment tax records if you pay staff (IRS). In the UK, self-employed people must keep records for at least five years after the 31 January submission deadline of the relevant tax year (GOV.UK).
Wherever you are, check your local rules or ask an accountant, and keep old cash books and receipts somewhere dry and safe.
Paper, spreadsheet or app?
Any of them work, as long as you use it every day.
- A paper cash book is cheap, fast at the counter and needs no battery. Many shops still use one for good reason.
- A spreadsheet adds the totals for you and is easy to share with an accountant.
- Accounting software makes sense once you have staff, stock or tax filings to manage.
To be clear about where doMahan fits: it is a personal day planner, not accounting software, so it is not a replacement for a proper business cash book. What it is good at is the habit around it. You can set a daily reminder at closing time to "balance the cash book", track your own personal spending separately from the business in any currency, and see on the calendar which days you actually did it. It is free and in testing on Google Play, and you can join the beta here.
Whatever you use, the rule is the same: write it the same day, balance it every evening, and keep the receipts. Do that, and you will always know how the day really went.
Quick answers
What is a daily cash book?
A daily cash book is a record of every amount of money that comes into and goes out of a business, written down on the day it happens, with a running balance. Small shops, market stalls, tutors and freelancers use it to know exactly how much money they have and where it went.
What columns should a cash book have?
A simple cash book needs five columns, date, details of the sale or payment, money in, money out, and the running balance. Many people add a column for payment type, such as cash, card or bank transfer, and a column for the receipt number.
How do I balance a cash book?
Take the opening balance, add all the money that came in during the day, and subtract all the money that went out. The result is the closing balance. Then count the cash in hand and check it matches. If it does not, look for a missing entry before the day ends.
How long should I keep cash book records?
It depends on the country. In the United States, the IRS generally asks for records to be kept for three years, and longer in some situations, and in the UK, self-employed people must keep records for at least five years after the 31 January filing deadline. Check the rules where you live, or ask an accountant.
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