How do I make a cash report?

Many clients ask us this question, and the simple answer is, yes; if you receive cash payments from clients, you do have to make a cash report.

Doing so is required by law.

What is a cash report?
A cash report is not to be confused with the sales report that you print from the register. The report involves documenting how much cash you had in the morning and the evening – basically, how much money that went in and came out of the cash register.

How do you make a cash report?

We have made an instructional video for you, if you prefer learning it this way:

Otherwise you can follow the written guide here below:

Gather all cash transaction documentation
To create your cash report, gather up all the receipts throughout the day that involve either cash payments from your café customers or cash payments to clients/suppliers. This will allow you to document your daily cashflow.

Choose a cash report template
You can find templates on the website here to create your daily cash report (http://www.daniaaccounting.com/download/), including one in PDF and one in Excel. Any template will do, as long as it provides the key principles of a cash report, which include stating how much money you had at the start and end of the business day.

Cash at the “start of day”
If you have a café, and you start the day with 500 DKK in your register, you note this on the relevant space in the cash report, under “cash at start of day.”

Calculate incoming cash
Once the working day is finished, calculate your cash sales during the day and write the amount in the incoming column. Sometimes sales are a combination of cash and credit card payments. If this is the case, include the credit card sales with the cash sales in the incoming column. As per our example, if you have 1.000 DKK in cash sales and 1.000 DKK in credit card sales, write 2.000 DKK in the incoming column.
Any other incoming cash should also be included here. For instance, if you supplied the register with money from your private pocket at some point during the day when you didn’t have sufficient sales and needed to pay a customer, write in the incoming column of the cash report, “deposited from my private money,” along with the amount you supplied the register.

Specify credit card sales
The cash balance will be corrected in the next line, in which you will specify that the 1.000 DKK in credit card sales was “transferred to the bank.” The document we use for this is called a transaction total, which is printed from your credit card machine, in order to transfer the money to the bank. You must now add this 1.000 DKK to the outgoing column, which will balance out your cash total. There’s always at least two columns on a cash report template – one for the cash, the other for the bank.

List cash expenses
Next, you’ll list all the cash expenses you’ve had. As per our example, if you own a café, maybe you had to make a trip to the supermarket to pick up some items that you ran out of during the day. If you buy these items in cash, you will list this receipt on your cash report; if you paid with a credit card, don’t list it. Larger costs – like rent, utilities, your telephone bill, things that you pay with your internet bank – are not part of the cash report. Only items paid in cash must be listed; not items paid through your bank account.

Calculate the “end of day” cash total
After you’ve listed all cash expenses in the outgoing column, the calculation for your “end of day” cash total is quite simple.

With our example, you had 500 DKK in the morning. You must add to that the money that came into your register during the day – the sales. You had 2.000 DKK in sales (cash and credit card), so you are now at 2.500 DKK. If you didn’t have any additional cash added to the cash register, then you subtract the 1.000 DKK in credit card sales which were transferred to the bank. Now, you have 1.500 DKK.

Next, let’s say you had three expense receipts at 100 DKK each, paid in cash. Subtract 300 DKK from your 1.500 DKK; you’re now at 1.200 DKK. This is the amount of cash you ended the day with. You must now declare this 1.200 DKK on the line which reads “cash in the evening.”

Count the money
For the tax office, it’s important to document that you actually have the 1.200 DKK. And to do that, you must physically count the money. Open the cash register, count the cash, and record this on a piece of paper or spreadsheet, noting how many 100 DKK bills you have, how many 50 DKK bills, 20 DKK coins, etc.

Cash differences
Sometimes you’ll have a little more or less than what your cash report indicates you should. For instance, this café’s cash report totals 1.200 DKK, but they counted 1.205 DKK. This is called a cash difference and usually occurs if a client pays a little extra or you return too much. Counting the money will reveal these cash differences.

If you have a cash difference, you write on the first line of tomorrow’s cash report, “cash difference from yesterday,” and on the incoming section of the cash register, the amount of 5 DKK (if it’s a negative cash difference, you would write this in the outgoing column). You must then add the 5 DKK into the register (again, if it’s a negative difference, you would take out 5 DKK).

The next morning, when you open up the cash report, under “cash in the morning,” it will read 1.200 DKK, and on the first line under “cash differences from yesterday,” 5 DKK will be listed in the incoming column; so you will start the day with 1.205 DKK in the cash register.

Continue this daily. The cash report and the spreadsheet used for calculating your physical cash is part of your accounting and should be submitted with all your invoices and sales. When we do the booking, we’ll reconcile your cash register. Again, this is a legal requirement if you receive cash from your client.

Consequences for not making cash reports
Dania Accounting can do the booking without these reports, but the legal consequences for not completing your daily cash reports can be pretty severe. If you have a tax inspection – for instance, if the tax office thinks you neglected to report some sales – then without a cash report, they can dismiss all of your accounting and estimate your sales, as they see fit.

Although you must prepare this report by law, depending upon the business, you can choose another interval by which to report your sales. But most companies will make cash reports daily, especially shop owners.

Do you have any questions about the cash report?

Please send us an email: info@daniaaccounting.com

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