Cash accounts are created to record money received or spent from accounts held with financial institutions, including current/checking accounts, savings accounts and credit facilities.
Cash accounts can also be used for petty cash imprest accounts and cash floats.
Before you create the first cash account, you need to enable the Cash Accounts tab. To do that, click Customize under the list of tabs.
Select Cash Accounts option.
And click Update button at the bottom to confirm your selection.
You will see Cash Accounts tab added to your list of tabs on the left side.
When you click the tab, you will see the button to create a new cash account.
You should only add cash accounts that are business accounts. Personal credit cards and personal bank accounts used infrequently for business transactions should not be added as cash accounts.
Example
Our business “Brilliant Industries” has one business bank account used to receive money from customers and pay suppliers & employees. The business holds cash on hand to pay for staff amenities and other small petty cash expenses. The business owner occasionally uses a personal credit card for business expenses.
You will create two cash accounts.
- Business bank account
- Petty cash account
Don’t create a cash account for the personal credit card of the business owner because it is a personal account.