What is cash balance

«Cash balance» covers a wider financial concept in the corporate world. The cash balance represents the total amount of money a company has. This includes not just the physical cash in the registers but also liquid assets that can be quickly turned into cash if needed.

«Cash balance» is often used alongside with «cash holdings». This is the physical money a company has. It can be cash stored securely in registers or safes. Sometimes, liquid assets that can be quickly turned into cash are also considered part of the overall cash balance.

Cash balance in accounting

The cash balance is considered a current asset and must be included in the company’s balance sheet.

Companies often maintain a cash journal to track the daily cash balance. Each day’s total is carefully recorded and checked for accuracy. The reconciliation process involves matching the amount recorded in the cash journal with the figure in the company’s accounts.

This procedure is generally structured. The cash count is documented in the cash journal, confirmed as accurate. Then, it is cross-checked against the accounts. This ensures that the figures in the records match those in the financial data, providing a clear picture of the company’s available cash.