What is the Importance of a Cash Book and Bank in Accounting in Companies?

In accounting there are mandatory elements within an accounting system, which should not be lacking to keep control of a company; It should be noted that it is just as important to know how to keep a budget, as it will be the basis for the accounting records that will be made later in the accounting system. Here we will tell you the importance of a cash book and bank in accounting in companies. And all the information you need to apply it in your business.

Cash book and bank

To know the importance of an element, we must know its definition. As well, the cash and bank book it is simply a ledger or is sometimes called an auxiliary journal. This book or journal includes the record of cash inflows and outflows, both in the business cash, including petty cash, and in the Bank accounts.

the accounting books of a company

It should be noted that those companies that keep complete accounting or have annual gross income that exceeds a specific number of tax units, They are obliged to use the Cash and Bank book.

When used, when the month ends, and you have in detail the cash movements and account movements, it will close and create a journal entry called centralization of income and cash outflows to the journal.

Importance of the cash and bank book

Taking into account the above, we can indicate its importance within a company or company, because it controls the values, referring to cash or bank checks, which the company delivers and receives, so that it later reflects an available balance. Due to its control, makes it easy to centralize payments and collections. In other words, control and manage money, one of the vital elements for the operation of a company.

user registers the capital of a company

It is worth adding that this book can be taken from 2 different ways. Manually and using single sheets. When we start using it, we must comply with certain formalities that we will detail below.


  • In the Header Data. You need to carry a title to the record or book. You must include a field to enter the period that corresponds to the information that is recorded. Another piece of information that must be reflected is the RUC number of the debtor taxpayer, such as their personal data, names, surnames and company name.
  • Record of operations. You must ensure that it complies with a chronological order. The writing must be legible (this includes without spaces, amendments or signs of having been modified, or interpolations). The amounts are totaled in national currency.
  • On each page, you must use terms “go” and “come” at the beginning and at the end of it respectively. If in any case, no operation has been carried out in a specific taxable year, you must write the legend “No operations”. Remember that in the original pages, it is not allowed to attach sheets.
  • Something that should not be forgotten when using the cash and bank book is that must be legalized, by a notary. If for any reason it is not possible, you must have a lawyer who is located at the tax domicile of the tax debtor.
  • Regarding the format and information, it is important that you use 2 types of formats: Format 1.1 (where the cash movements must be detailed) and 1.2. (The movements corresponding to the current account will be detailed). As for these models or patterns, on the web you can count multiple templates in Excel to facilitate business accounting.

All these interesting aspects related to the cash book and Banks are part of the accounting system and policies. Very useful and vital for the correct management of the capital of a company. Much of the success and the achievement of the objectives depends on the good management of resources. We hope that the information has been useful to you. And we hope you leave us your comments.

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