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Think about your business’s sales and purchases for a moment. Do
your customers pay by cash, check or credit card? Do you buy goods
and services for cash? Do you take money out of a bank deposit to
cover expenses? If one or more of these conditions are present in
your business, you may benefit from preparing a daily cash
report.
Think about your business’s sales and purchases for a moment. Do your customers pay by cash, check or credit card? Do you buy goods and services for cash? Do you take money out of a bank deposit to cover expenses? If one or more of these conditions are present in your business, you may benefit from preparing a daily cash report.

A daily cash report can be helpful for any business with recurring cash transactions. Although variations exist, the basic format is simple. First, daily totals are calculated for taxable sales, nontaxable sales, sales tax collected and miscellaneous cash received. These are added to get total cash receipts. Purchases of goods and services made out of the day’s cash receipts (including any draws and cash advances) are subtracted to compute the bank deposit. The computed bank deposit less the actual one equals the cash shortage or overage. Backup for these figures in the form of sales invoices, cash register tapes (if applicable), purchase receipts and deposit slips should be attached to the daily cash report. They are then filed by date.

The benefits of preparing a daily cash report are many. By separating taxable sales, nontaxable sales and sales tax, the report can reveal whether a sufficient amount of sales tax is being collected. Recording cash purchases of goods and services helps ensure that you receive every possible tax deduction for the expenses of operating your business. By comparing a computed bank deposit to the actual one, the report can quickly identify any cash control problems. And keeping all of the daily cash records in one place expedites the preparation of financial statements.

The daily cash report should be reviewed on a daily basis by the manager/owner to spot any reporting deficiencies.

Kerry Lorincz is a CPA and a partner with the accounting and business consulting firm of Bianchi, Lorincz & Company located in downtown Hollister.

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