A cash disbursements journal allows you to record all cash payments for a certain time frame, such as on a monthly or quarterly basis. Accounting software can prepare the journal for you based on checks you write through the system; otherwise, you can record your transactions manually. In the latter case, purchase a cash disbursements journal from an office supply store or use an office suite program to calculate and record the information yourself.
1. Add up the amount of cash that was disbursed during the reporting time frame. This includes payroll expenses, taxes, office supplies, materials, rent and insurance. Keep each total separate based on the type of purchase. Note that some payments remain constant over long time frames, such as payroll if no additional employees are hired or terminated, and rent. However, prices for things like office supplies and materials can fluctuate more as they are generally purchased on an as-needed basis.
2. Record each cash disbursement as it occurs under the journal’s respective heading. For example, a basic disbursements journal may include the following headings: "date," "check number," "cash" (if applicable), "payment to," "item" and "amount." A more comprehensive journal may have those headings and additional headings, which show different types of payments made to the same vendor, such as materials, supplies or utilities. You can assign a job number to the purchase. For example, assigning a job number to each purchase made from a specific vendor can help you to determine the amount spent on each job.
3. Tally the total checks paid out and put the total amount in the last row.
- A cash disbursements journal serves as a checkbook ledger, which is used to help create other financial records, such as a balance sheet.
- One of the best ways to figure out what to include when calculating cash disbursements is to include all cash payments, such as accounts payable, petty cash purchases and operating expenses.
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