It important it is to keep track of your finances. Sometimes, however, your bank statement may not be up-to-date. Even when you trust your banker, it is wise to maintain your own financial records as you might be more informed about upcoming transactions than your bank.
Although most businesses are conducting their transactions online, every businessperson needs to keep a checkbook register. The register is essential because your available balance might be inaccurate, and banks do sometimes make mistakes and forget or delay making entries for some of your transactions. For an up-to-date reflection of your transactions, a check register is recommended.
What Is a Checkbook Register?
Also known as a cash disbursements journal, a check register is where you record all your cash and check transactions during an accounting period. A check register also helps you keep a record of your personal checking account and calculate your running balance. This not only allows you to see but continually update your account balance. This is by recording any deposits to your account or withdrawals and transactions that are yet to hit your account.
Checkbook Register Template (Excel)
Why Use a Checkbook Register?
A check register forms an important component of your accounting process. The register reveals what type of purchases you make and helps make spending adjustments whenever needed. Even if you regularly check your balances online, the available account balance might give you inaccurate or misleading information.
Check registers, unlike online statements give you an up-to-date, real-time record of your balance and how much you have available in your account to spend. Tracking your transactions not only ensures that you know when and how money is flowing in (and out) of your account, but also gives you the baseline needed to plan and detect problems.
Using a check register has many advantages for your business or company. It helps you to:
- Budget better
- Avoid overspending
- Keep transactions up-to-date and organized
- See an accurate account balance
- Track spending
- Spot mistakes
- Reconcile bank statements.
Checkbook Register Template (Word & PDF)
How to Create a Checkbook Register?
When it comes to creating a system of recording transactions in your check register, there are several options.
You can for example:
- Use a spreadsheet
- Manually record transactions on paper
- Use accounting software.
Paper checkbook registers have been used for years, and many people prefer recording this information by hand. However, you can also print a basic check register or download a template online. A manually created paper check register is a good option but, can be time-consuming and prone to errors.
A spreadsheet is an improvement over a manual check register. However, it still requires you to key in your own figures. Using some basic accounting software helps in organizing transactions in the check register. The software also gives you a snapshot of your financial dealings and helps you keep up-to-date regarding your running balance.
Most bookkeepers typically record business transactions on the checkbook register before posting them to the relevant ledgers. The checkbook accounts will depend on the business or company. A manufacturer will, for example, make entries for the purchase of raw materials and production cost. On the other hand, a retailer will make entries for salary, account payable, and inventory expenses. The checkbook register will show the credited or debited accounts in each case and how each transaction affects the entire business cash balance.
It is convenient when you electronically record checking account transactions using Microsoft Excel. The check register can be customized to categorize expenses and create a formula that helps you keep track of the running balance in your account.
When You Should Use it?
It is essential to be diligent about updating your check register daily. Recording every transaction serves as a reliable information base for your financial activity. For example, when you use a debit card or write a check, immediately record the transaction in the check register.
Every week, endeavor to save your debit card and ATM receipts and make sure these are entered in your check register.
Tip: the more problems you encounter with insufficient balances, the more often you might need to update the check register.
Your check register can help in the following:
- To identify bank mistakes: Remember that bank mistakes are rarely in your favor and you should report them as soon as they are identified.
- To catch identity theft: If you notice something unexpected, report it to the banking authority as quickly as possible to avoid issues of identity theft.
- Avoiding bounced checks: Bounced checks are costly and create a ripple effect on your finances.
- When you want to know how much money you have or can afford to spend: A check register enables you to know whether you might need to transfer some money to your checking account to help you cover expenses. You can, for example, avoid overdraft fees when you move funds from a savings account to cover any upcoming expenses.
- Knowing what you have already paid off: The register helps to keep track of all the amounts paid, debts cleared and the dates when it was done in case proof of payment is needed.
- See and monitor spending trends: Manually entering your spending forces you to pay attention to where your money is going and make necessary changes if needed
Today, even when much (if not all) of your financial transaction information is accessible by the click of a computer button, it still a prudent idea to keep your own record and regularly update it.
Check registers help you in tracking all your transactions and avoid penalties such as late or overdraft fees. They serve as an accurate and up-to-date record of your financial situation, thus helping you manage your finances more efficiently.
The information in your checkbook register is also essential in reconciling bank details. The information provides an excellent pointer on the checks you have issued, those still on the waiting list, as well those that the banks have already cleared. Tracking your transactions ensures you always have adequate balances in your checking account.
Today you can also download check register templates that can be modified to suit your unique needs.