cash receipts journal

Using a Cash Receipts Journal to record customer payments will tell you at a glance how much funds you've brought in this month.  It will also help you track which customers have paid you, and which ones have not.

A Cash Receipts Journal can be a computer spreadsheet (like Microsoft Excel) or it can be kept on paper.  It depends on what you're comfortable with.  If you're going to use paper, I suggest using 13 column accounting paper, like this:

This gives you plenty of columns to use, and you get several pages in one pad.  If you're using Microsoft Excel, you've got an unlimited amount of columns to use.

You want to have columns to record the amount of funds you receive, who the payment came from, and which invoice it paid.

Here's an example.

cash receipts journal example

I created this example in Excel.  This would be for a repair shop.  I've got columns for the date, who the check came from, the invoice number that was paid, and the payment amount.  In the next section, I've also broken down the invoice amounts by sales category - supplies, parts, labor, and miscellaneous.

You could also add a column for each of your regular customers, if you don't have that many.  Or maybe a column for commercial customers and one for residential customers.

Another option would be to combine a Sales Journal with a Cash Disbursements Journal, and track each sale as well as each payment.  Like this:

This journal has columns for the date and amount of each sale.  Then it has columns for each customer.  This wouldn't work for retailers, who have lots of customers.  But you may have a category that makes sense for you, like place of sale: store - internet - craft show.

Then you need a column for the invoice number for each sale, and the amount.  You can then have columns to break down each sale into another category, like here I've done type of product/service, as in Supplies - Parts - Labor.

The reason for doing this is to have information at the end of each month and year that you can look back at, and make better business decisions.  You can see which category of sales is doing better, and which is doing worse.  You can track how much each customer is buying.  If they're purchasing less from you than last year, you can find out why.  If one product isn't selling well, you can find another to replace it.

Another great use for this journal is to track customer payments.  If you enter each sale, as in the example above, you can add some columns for customer payments.  When a customer pays, you can fill in the check number and amount of payment.  You could also have a small column to use to place an "X" in the line of the invoice the customer paid.  That way, you can go back periodically, and look for lines without an "X".  That invoice hasn't been paid yet, and you can call the customer or send a reminder letter.

For a more detailed example and instructions for creating and using a Cash Receipts Journal, see Using a Manual Accounting System.

Return to my Home Page here.