Cash records: how to keep track of cash properly
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
If cash moves through your business you keep a cash book of every receipt and payment; the balance can never be negative and you keep the receipts for seven years.
- Count the till at opening and closing of every working day and record both figures on a daily sheet.
- Record cash differences as they are: a till that always balances exactly is what stands out in an audit.
- Poor cash records can reverse the burden of proof: the inspector estimates your turnover and you must prove otherwise.
- If you trade in goods you may not accept or make a cash payment of € 3,000 or more; that ban does not apply to providing services.
For the tax authorities, cash is the most sensitive part of any set of records. There's no bank statement to confirm your story, so you have to be able to show yourself what came in and went out. This article explains when you need to keep cash records, how to do it and which mistake most often leads to trouble.
When do you need cash records?
As soon as you receive or spend cash in your business. That mainly applies in hospitality, retail, at markets, in hairdressing and in construction, but also if you occasionally let a client pay in cash. If everything comes in by bank transfer or payment request, you have no cash balance and don't need a cash book. If in doubt, ask whether money that belongs to your business ever ends up in your wallet: then the answer is yes.
What does a watertight cash book involve?
A cash book is a running record of all cash receipts and payments, with date, amount and description. The balance it produces must match the money you actually have on hand. So count your cash regularly and record that count, for example on a daily sheet. Small differences are human, but do book them as a cash discrepancy rather than leaving them out. If you use a till system, keep the daily reports and the underlying detail, not just the daily total.
Why a negative cash balance is a problem
In reality your cash balance can never fall below zero: you can't spend notes that aren't there. If your books nonetheless show a negative balance, that's proof that receipts are missing or payments were booked incorrectly. For the tax authorities that's an immediate signal to dig deeper, and in the worst case to estimate your turnover themselves. So when closing each month, check that the cash balance is positive and explainable.
Private and business in the cash book
If you take money from the cash box for private use, book it as a private withdrawal and not as a cost. If you put private money into the business to pay for something, that's a private deposit. These are the entries that keep your cash book balanced without distorting your profit. Also take cash to the bank regularly and keep the deposit slip; a cash balance that builds up to thousands of euros over months always raises questions.
What's sensible to do?
Keep your cash book daily rather than reconstructing it afterwards; making it add up later takes more time and rarely produces a credible whole. Keep all till receipts, daily sheets and count slips for seven years, just like the rest of your records; for daily sheets and count slips you can agree a shorter retention period with the tax authority, but put such an agreement in writing. If you handle a lot of cash and want to be sure your setup survives an audit, go through it with us once.
The daily rhythm that survives an audit
In cash-heavy sectors a books investigation nearly always revolves around the till. The inspector works back from purchases and diary to the turnover that should have been there. A complete daily rhythm is your defence.
- Count the till at opening and closing every working day and note both figures.
- Record every receipt and expense on the day itself, with a till slip or receipt; scan or photograph them straight away, because thermal paper fades.
- Record cash differences as they are; a till that always balances exactly is itself the signal of smoothing.
- Book private withdrawals from the till immediately, and bank surplus cash regularly.
- Keep your till system's daily statements; with diary and purchases they form the complete story.
Frequently asked questions
Must I keep a cash book?
As soon as you receive or spend cash, yes. Daily updates are the norm in cash sectors; a weekly reconstruction quickly counts as deficient.
What do I do with a cash difference?
Record it as it is, as a cash difference. Small differences are normal and credible; smoothing them away is what makes records suspect.
May I take private cash from the till?
Yes, if you book it immediately as a private withdrawal. Unrecorded dips into the till are exactly what an audit looks for and finds.
Is accepting card payments only a solution?
It helps enormously: without a cash flow your bank records suffice and the cash book lapses. Refusing cash is allowed, provided you state it clearly in advance.
How long do I keep till statements and Z-reports?
Seven years, like the rest of your records. Digital daily statements from your till system count, provided they stay unalterable and readable. See retention obligation. Note tips received separately on your daily sheet; why that matters is in receiving tips and donations.
Sources
- Setting up your records, including cash recordsBelastingdienst · belastingdienst.nl
- Keeping records for seven yearsBelastingdienst · belastingdienst.nl
- Ban on cash payments of € 3,000 and overRijksoverheid · rijksoverheid.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
