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What Is a Cash Disbursement Journal?

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  • Written By: Mary McMahon
  • Edited By: Shereen Skola
  • Last Modified Date: 23 August 2016
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    Conjecture Corporation
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A cash disbursement journal is an accounting record of cash paid out. It may also be known as a check register, since it commonly includes a space to record check numbers, as few business payments may be made in cash currency. This document comprises part of the overall accounting records for a business. Such records allow accountants to track expenses, record events of importance, and balance the books to maintain accurate information on available funds and other matters of concern.

In an electronic cash disbursement journal, these records are kept in accounting software. Such software may communicate with a bank to download statement and account information. These programs can pull from the various records as needed so an accountant can prepare reports, get ready for taxes, and engage in other activities related to record keeping. It is also fully searchable and has filters to sort entries by type of expenditure, amount, and other categories.

In addition to electronic versions, hard copy cash disbursement journals can be kept as well. Office supply stores typically sell accounting books for this purpose. Business owners can also use a generic notebook, or design a custom form to use in a binder to track cash expenses. Hard copies may be used by smaller businesses with relatively low transaction volumes. These businesses may not be able to afford accounting software, or could determine that the cost of acquiring and learning a program doesn't outweigh the benefits it may offer.

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In the cash disbursement journal, each line provides room to note the date, payee, and amount of a disbursement. Space is also included to discuss the nature of a payment. In some cases, this may be done by placing the amount in a column like rent, utilities, or office supplies. Each column can be totaled at the end of a given period to track total expenses and develop a detailed record. This can be useful for organizing during tax season, when the separate columns help businesses quickly total purchases by nature to deduct them appropriately.

While typically designed for business uses, a cash disbursement journal can also be useful as a personal finance tool. Some people find it helpful to keep detailed personal finance records for budgeting and other reasons. Organized records can be especially valuable for people who want to find areas of their budget that they could trim to reduce overall expenses. For example, very high expenses for eating at restaurants or buying new clothes may become obvious when these purchases are tracked separately in a cash disbursement journal and compared to others.

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