If your business receipts are mainly cash receipts e.g. a shop or a bar, then it is important that the “cash account” is reconciled on a regular (if not daily) basis.

This reconciliation shows the amount of cash received and where it has gone. The cash may all have been banked or some might have been used to pay suppliers or even net wages.

In Sage use the Bank Receipts option to record the amounts which have been banked.

In order to properly reconcile your cash account your cash reconciliation should show:

1. The total takings
2. Takings split into the different types of sale
3. Any output VAT on those takings
4. Total of any purchases made from the cash received
5. Any output VAT on those purchases
6. The banking made
7. Any differences between the actual cash taken and the till records

These different types of receipts and payments should then be posted to the correct nominal ledger account in Sage.

As you can imagine, if the cash account is not reconciled then this can lead to us having to spend a lot of time reconciling it for the whole year when we prepare the Year End accounts.