What is a cash book?
A cash book documents the cash transactions of a company, above all in order to provide the tax office with the relevant evidence. It can be kept manually or electronically.
The cash book provides an overview of the current cash balance in the cash register, so all income and expenses must always be entered in the cash book. After closing time, the cash register is checked. This involves checking whether the target cash balance from the cash book corresponds to the actual cash balance in the cash register. To prove the accuracy of the cash book, all invoices and receipts must be enclosed.
Keeping a cash book is subject to strict guidelines and regulations that must be followed in order to meet the requirements of the tax office. Therefore, restaurateurs should always be meticulous in keeping the cash book to ensure transparent and reliable accounting.
Who must keep a cash book?
Keeping a cash book is mandatory for all companies in Germany that are required to keep accounts. This is the case with an entry in the commercial register, but also without an entry in the commercial register, as long as it is a business operation organized according to commercial standards.
A business organized in a commercial manner is characterized by a large number of employees, a high volume of sales, a large number of business contacts and an extensive range of goods. If the turnover does not exceed 600,000 euros per year and the profit does not exceed 60,000 euros, there is no obligation to keep a cash book. Operators of a small business are also not required to keep accounts and are therefore also exempt from the obligation to keep a cash book. Unless they voluntarily register in the commercial register.
What information must be provided for each business transaction?
Basically, the following mandatory information must be recorded for each individual business transaction:
- date
- receipt number for a unique attribution of the business transaction
- amount of revenue or expenditure with currency specification
- Purpose (accounting text)
- tax rate
- Input tax/VAT of the amount
- current cash balance
Cash book in gastronomy: What is important?
In order to ensure proper cash accounting in gastronomy, certain principles must be observed. This includes compliance with the generally accepted accounting principles (GoB) under commercial and tax law, as well as the principles of the tax authorities for the retention of documents, records and books in electronic form and data access.
Another important principle is the single, correct, complete, orderly and timely entry of all entries in the cash book. Thus, all cash receipts and cash disbursements must be recorded daily. A later recording is only possible if important operational reasons prevent the timely recording. It is also important to record the debit change in the cash balance.
Other requirements for proper cash accounting:
- No entries may be made without a receipt.
- The receipts shall be numbered consecutively.
- The cash report shall be kept without gaps and continuously without blank lines.
- Entries must be made in order of the day and not arbitrarily.
- The cash balance of the cash register shall be checked and recounted regularly.
- Target and actual balance must be comparable at all times.
- Entries may not be subsequently changed or made unrecognizable.
- An incorrect entry may be deleted, but must remain legible and traceable. The correction is made by a new entry.
- A negative cash balance is technically not possible and must not occur.
- Cash movements between the cash register and the bank must be recorded without gaps.
- Private deposits and withdrawals must be documented daily.
- Amounts advanced privately and the corresponding repayments from the cash register are to be recorded as expenditures. The date of disbursement from the cash balance is relevant.
Orderly, correct and complete cash accounting is essential in order to avoid serious consequences in the event of an audit.
What are the consequences of incorrect cash accounting?
The aim of proper cash accounting is to make tax evasion difficult by documenting the misappropriation of cash income. Faulty accounting is therefore not a trivial offense, but a potential tax evasion. The tax office has the right to carry out a cash inspection at any time and to check the cash book with regard to manipulations. Irregularities are then quickly uncovered, which can result not only in back taxes, but also in high fines, sanctions under commercial law and criminal proceedings. A properly maintained cash book is therefore imperative.
