A cash journal is a simple hard copy or electronic document that is used to make immediate accounting entries of both receipts and expenditures. Transactions that are entered into a cash journal are usually recorded daily, or at least in chronological order. Part of the charm of a cash journal is that financial transactions entered as line items can be reviewed quickly when necessary, as well a providing a quick reference document when entering the transactions into other sections of the accounting books.

A cash journal can be used for keeping up with a broad range of receipts and payments, or may be utilized to track one area of activity. Many businesses choose to maintain a simple cash journal as a means of keeping a record of income and disbursements associated with a petty cash fund. This can allow authorized employees to quickly handle a transaction out of petty cash and make a quick entry with the basic information. At a later time, the transaction can be fully documented in the balance sheet ledger or other appropriate record.

The key to an effective cash journal is entering enough information about each financial transaction to properly account for the income or expense. Generally, a cash journal will include columns to record such basic detail as the originator of the transaction, cash in or out, the amount of the cash associated with the line item, the date of the transaction, and a brief description of the action. This is usually enough information to allow a more comprehensive recording at a later date.

Even a home budget can benefit from using the principle of the cash journal. Using a simple columnar book or an electronic spreadsheet, it is possible to set up a simple cash journal that everyone can use. A home cash journal will make it possible to track all the expenses associated with running the household, along with funds that are set aside for that purpose.