Cash report - Instructions for proper cash accounting

In order for you to correctly record your cash receipts and expenses, you will need Cash Reports. Only then you can keep an orderly cash book. It is important to be aware of the special requirements of cash management to avoid serious mistakes.

How you should write a cash report and how you don't have to be afraid of the cash check anymore, you can read in the article.

This is what you can expect today:

What is a cash report?

The Cash Report documents all cash receipts and cash expenditures within one business day. The report should clearly show how much money was taken in that day (daily takings). The result is also known as the daily lottery ticket.


To find a legal basis for the cash report here, entrepreneurs must take a look at the tax law. Predominantly a role plays thereby the value-added tax. Thus gladly the conversion of an enterprise is kept low, in order to avoid the tax on the conversion. This procedure is also called tax evasion and should be a term for every entrepreneur. With reference to the cash report the following two paragraphs from the tax law are essential:

Cash report vs. cash book

Do I have to keep a cash report or a cash book? Or is that not the same? No, Cash reports are of course an important part of the cash book, but there are other differences between the terms. The daily reports in detail only provide the basis for a correctly kept cash book. The cash book also does not show the daily cash position, but documents business transactions. We find an exception in the cash report of the open store cash register. Here, cash reports in a row can replace a cash book. But: Even with the open cash register, daily reports must be generated. And also the change must be counted.


A cashbook records the cash paid income and expenses. The cash reports are the basis for this. It is important that the balance must always be positive. This is also shown as an asset item in the current assets. The cash report also counts on the cent exact amounts and determines the daily income.

Open cash register

Open cash registers are colloquially also called bar cash registers or drawer cash registers. They can be found in smaller retail stores, boutiques, or smaller kiosks. The money is kept in individual drawers and there is no technical support. With electronic cash registers, the payment transactions are stored in computerized form. The purchase of such cash registers is of course more expensive, but it is essential for larger companies, such as supermarket chains.

Who has to create a cash report?

Who has to keep a cash report at all? In general, cash books are an integral part of accounting or bookkeeping. That is: Whoever is subject to the accounting obligation must keep a cash book. The following overview shows you whether you also need to create cash reports.

  1. business people: They must always keep cash reports. Unless they generate less profit than 60,000 and less turnover than 600,000 Euros.
  2. freelancers: They do not have to keep cash reports.
  3. companies: Due to the company forms they have to write cash reports. This does not apply to GbR or PartG. However, if there is an accounting obligation for other reasons, the obligation to create cash reports is also associated with this.
  4. Farmers and foresters: They are also obliged to keep cash reports. Unless they fall below the profit and turnover limits of 60,000 or 600,000 Euro. There is another exception if the value of the usable area is below 25,000 Euro.

Of course, you do not have to create reports or keep a cash book even if your business runs without cash payments. However, as soon as you own a cash register or a cash register and have to do bookkeeping, the cash register report obligation applies to you as well.

Cash report for freelancers

Freelancers are not subject to any accounting obligation. They do not automatically have to keep a cash book or write cash reports. Not even if they receive cash payments from time to time. However, this does not mean that they do not have to provide proof. Those who wish can keep a voluntary and simple cash report book. For example, if you do a lot of cash transactions, this step is even recommended.

Recording obligations within the scope of the cash report

According to § 146 AO is clear of should the incomes and expenditures of the cash daily be held. This is only a recommendation and not a mandatory regulation. But does that mean that entrepreneurs are actually not obligated to record their cash income or cash expenditures? In fact, the law leaves a certain amount of leeway here. But only if the cash transactions are only carried out in passing. So not daily and routinely happen. Or, however, if various events make it impossible to make a booking on the same day. In all other cases, all entrepreneurs who do business with cash are subject to the obligation to keep records.

Obligation to retain receipts and documents

Anyone who concludes business with a changing clientele must keep all accrued receipts and records as accounting vouchers or other documents for at least 10 years. For businesses selling goods of low value, cash register strips, sales slips, and receipts must also be kept. Notes that could explain inconsistencies in cash management should be kept in your own interest. Otherwise, the tax office could complain about an error. If there are records by a data processing system, they should also be stored digitally.

Mandatory data of the cash report

Of course, cash reports differ from each other, but in any case, they must always contain the mandatory information. A daily cash report should contain the following information:

  • Date and consecutive number
  • Cash on hand after close of business
  • expenditure during the day (net amount + indication of input tax in % and Euro)
    • Purchases of goods and ancillary costs
    • Business expenses
    • Private withdrawals (only with personal receipt)
    • Other expenses (bank deposits etc.)
  • Cash balance of the previous day (will be deducted)
  • Cash receipt
  • Cash receipts (daily lottery ticket)
  • Signature of the cash counter

 

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Create a cash report - step by step:

How to create a cash report? Actually, there is not much you can do wrong, as long as you understand what the difference between a cash report, a cash book, and a count log is. Two steps are important when creating a cash report:

  • Count the cash using a count log
  • Determination of the daily draw (= result of the cash report)

Take the time every day to count your cash in peace. Record the inventory down to the cent and don't forget important form details. Comprehensive accounting software with an integrated cash book function generally simplifies your bookkeeping many times over.

Counting protocol as proof of the cash management

A counting protocol counts as proof of correct cash management. It clearly shows how the cash balance is composed. A counting protocol is thus the receipt for the daily cash balance. It does not matter at this point what type of cash register you use.
The Count Log records the contents of the cash register at the end of the day. Divided into bills and coins. In order to proceed correctly here, you count to the cent and enter the result in the log. By the way, for larger cash balances, a money counting machine is recommended. It facilitates the daily effort of counting after closing time.

Formal requirements for the cash counting protocol

The current date of the count is, of course, important for the counting protocol. In addition, the log must be signed daily by the person who counted the cash register.

Daily lottery as a result of the cash report

The result of a cash report is also called a daily lottery ticket. Meant are all cash receipts within a business day. Thus it is indicated how much money has entered the cash register on this day. But how do you determine the daily cash position?

What does a progressive cash report mean?

A progressive cash report is the opposite procedure of the formula just shown. However, the result would be wrong if you calculated the daily lottery ticket. You would calculate the initial cash balance plus deposits, minus private withdrawals, plus the cash balance at the end of the day. This result is not correct.

What does a retrograde cash report mean?

The above procedure and formula represent a retrograde cash report. First, you calculate the cash balance and then calculate back. To check the result, you can finally run the progressive cash report.

Checkout

The checkout can affect anyone, but most of all it comes unannounced. This procedure is relatively new, however, and has only been practiced since January 1, 2018, throughout Germany. This is not a tax audit, but an unannounced and spontaneous check of the cash management. An employee of the tax office is sent in this context. Of course, this employee has been prepared for this in advance through training and auditing. During the inspection itself, it is important to recognize to what extent the electronic or digital cash register has been manipulated. In this case, it is a criminal offense and those who are checked must expect back tax payments. The tax office is then authorized to make estimates.


Also, fines of up to 25,000 Euro can be incurred in addition to the estimate and back payment. Depending on the severity of the offense, it can be quite expensive if the cash register was not managed properly. For example, you may fail to comply with the obligation to keep individual records. Or, there are no numbered receipts or the Z receipts show different amounts. It is important to know at this point that even open store cash registers are not excluded from the cash check.


Tip: Whoever uses a cash register that conforms to financial regulations is playing it safe and will probably get through the cash audit without any problems. But even without such a cash register, entrepreneurs can prepare themselves for the cash check.

Errors in cash management

Typical errors in cash management occur frequently, but do not protect against punishment. Therefore pay attention to the following things:

  • Create your reports daily. This way you avoid a too uniform typeface, which gives the impression of having made up several reports in one day.
  • Count the contents of the cash register down to the cent. Smooth Euro amounts are unlikely and indicate that you have not counted the cash register correctly.
  • Don't calculate cash receipts using the progressive method. Always use retrograde cash management.
  • Count not only once a month or every week, but daily If you do a spontaneous check, you may be missing a few days
  • Keep the cash reports carefully. Preferably in a place where they will not be lost.


Important: A negative final balance is not really possible, because a cash register can be either empty or filled, but never go into the red. If you have not counted, a negative cash balance could occur. Avoid this.

Reasons for the cash report

Cash reports are the basis for a proper cash book and are especially important for the state and its tax revenues. The tax office is authorized to inspect your cash books. For this reason, you must keep them for a while. Errors in the reports can have considerable consequences. Fines can be imposed, but also imprisonment if there is evidence of tax evasion. Furthermore, your business license could be revoked. But: Not every small formal error is immediately punished or fined. But if you keep your cash books properly, you have hardly anything to fear. Because the tax office also knows that minor errors can occur.


Of course, it is not just arbitrariness if you are obliged to write cash reports. On the one hand, cash reports give information about the daily and actual income and expenses in the company. This is of course also interesting for you and your business development. Therefore you know exactly on which day you had which income. It enables you to plan better afterward, for example, you can support your high-turnover days even better with appropriate advertising measures.

Advantages of cash reports

If you are affected by the obligation to keep financial reports, there may be some advantages for you as an entrepreneur. On the one hand, cash reports provide information about the daily and actual income and expenses in the company. This is of course also interesting for you and your business development. Therefore you know exactly on which day you had which income. It enables you to better plan afterward, for example, you can support your high-turnover days even better by appropriate advertising measures.

Conclusion

A cash book records all cash receipts and expenditures in the company. To keep a proper cash book, you need correct cash reports. These are the ones that are examined during a cash audit. Anyone who has to keep accounts must keep a cash book. In some cases, however, there are exceptions. The result of the cash reports is called the daily lottery. Use the correct retrograde procedure here in order not to make a mistake.

 

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