When you have dealings with cash, you’ll definitely have the need to transfer physical cash to the bank on your bank account. The cash receipt is gaining an asset for sure on your balance sheet, but it’s what happens with it inside the group what matters.

The initial cash related entry may be something like this (a very simplistic one):

Dr Cash

Cr Revenue

So eventually you may have loads of cash physically at your premises. Since holding cash there may not be the safest place, you probably want to take it into the bank. Depositing the cash on your bank account is usually more useful provided you don’t have cash dealings of your own with suppliers, employees etc. In case you’re not the one taking money to the bank on your own, you will probably use a special service for this. Continue reading →