The cash book is where you record all movements of cash, that is, all payments by the business and all receipts to the business.
Whenever you receive money (whether as a cheque or cash) you should record it on the receipts page (see the example below).
The following columns appear on the receipts page:
Purchase ledgers are used to record all suppliers' invoices; to show those which are still unpaid; and to allow VAT to be accounted for. Look at the purchase ledger example below. Whenever you make a purchase and receive a purchase, record the information as follows:
A sales ledger is used to record:
the sales for a month
how much cash was received
when the cash was received; and
what is currently owed to the business.
You should use the sales ledger to make a record of every invoice you issue.
A copy of each invoice should be retained, showing:
the details of the work for which the invoice has been issued
a unique invoice number
your VAT registration number
the VAT rate, and
the amount of VAT.