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FMV & Partners SA - Certified Public Accountant in Luxembourg

HOW TO ACCURATELY RECEIVE AND CHECK DOCUMENTS

Bank statements are filed by a financial organization and according to the statement number (the former one below and the recent one above).

All supporting documents of the transactions are appended to statements (statement of bank charges, copy of the bank transfer, copy of the cheque, order to pay insurances and taxes…)

WHY KEEP A CASH BOOK ?

In the current corporate life, it’s not always possible to pass some expenditures or receipts through a bank account.

Consequently, keeping a cash book in conformity with legal prescriptions allows the follow-up of
these particular transactions.

By receipt, we understand payment in cash by a client or the supply of money through cash withdrawal.

By expenses, we understand payment in cash to a supplier, the purchase of postage stamps, current expenses such as drink or parking expenses…

HOW TO ACCURATELY KEEP A CASH BOOK ?

A cash book is a self-copy or used with carbon paper, the first sheet (the original) comes off and the copy remains in the book.

The detachable sheets (originals) shall be enclosed to the accounting.

Book-entries are daily recorded without blank, deletions or alterations. The use of correcting fluid (TipEX…) is strictly prohibited!

All transactions are numbered and substantiates by a record having exactly the same number (receipt, ticket, copy of invoice….)

Supporting documents are filed (small documents are stuck or stapled onto an appended sheet in order to avoid being lost), according to the numbering order (smallest number below and the greatest above).

At the end of the day, it’s important to check the adequacy between balance and cash.

Banker’s orders and/or sufficient receipts of clients in order to cover expenses of the considered period are intended to supply cash.

Cash flow can’t EVER be negative. According to a common business practice, an auditor rejects all the accounting in case of negative cash flows.

During a tax audit (regular or “by surprise”), the auditor personally checks the adequacy between cash balance and cash book.

The cash book reports the following items:

  • Date of the document
  • Number of the document
  • Description of the transaction (bank transfer, purchase of stamps, payment of invoice n°10/04 from the client X or payment of the invoice n°329 from the supplier Y…)
  • The amount paid or received in the corresponding column.


At the end of the month, the column of receipts and expenses is totalized and the monthly balance shall correspond to the cash balance for the last day of the month.

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