Cash Memo Format
Cash memos are one of the most used documents before the advent of computerised invoices and bills. From a small kirana store to a large manufacturing unit, cash memos are the very first receipts used as proof of purchase between the buyer and the seller. Even with so many invoices in use, the usage of cash memos has never been decreased. The convenience offered by cash memos makes them the preferable way of providing receipts.
Cash memos are extensively used for cash transactions. A cash memo lists the name of the products, number, price, discount, taxes, etc., along with the buyer’s name and contact details. The sellers usually hold a copy of every cash receipt for themselves and record it in the books of accounting.
Cash memos are typically used by micro, small and medium enterprises across industries, including FMCG, vegetables & fruits, kirana, textiles, electronic goods, and so on.
The article discusses the typical cash memo format, the advantages and disadvantages of using a cash memo, and better alternatives for a cash memo.
What is a Cash Memo?
A cash memo is a document issued by a seller to a buyer recording a sale made in cash. It serves as a piece of evidence that the purchaser has made the payment. A cash memo acts as a documentary evidence of all the cash sales made by a business. A cash memo is issued to a buyer and is typically created along with a duplicate copy, which is retained with the business for its own records.
A cash memo is no lesser than an invoice and is considered a legal document. A duplicate cash memo is always filed to record all the cash sales of a business. The records are further used to pay tax and file tax returns, for tock management and cash flow management.
Difference Between a Cash Memo and An Invoice
A cash memo is slightly different from an invoice as the former records only the sales made in cash whereas the latter is used to record credit sales transactions.
While an invoice is issued before the payment is made requesting the same, cash memos are usually issued at the time of cash payment at the time of purchase. If the cash receipts are more than Rs.500, a revenue stamp needs to be affixed, whereas invoices do not require the same.
While a cash memo bears the signature of the seller, the invoice has the signature of the cashier.
Cash Memo – Main Contents
Different businesses follow different cash memo bill formats. There is no standard format set by any regulatory for cash memos. However, while using a cash memo make sure the following fields are included for easier data entry.
- Name of the buyer and contact details
- Name of the purchaser and contact details
- Serial number of a cash memo
- Order number
- Item description
- Tax registration number
- Terms and conditions
Cash Memo Format in Word or Google Docs
Using MS Word is one of the easiest ways to create a cash memo format. Using the sample cash memo format, you can create a similar one in a blank word document.
Using the sample quote format provided above, open a blank Word document, create a similar document with your business details, and save it. Make sure to insert all the contents listed above.
Whenever you wish you generate a cash memo bill, open the cash memo word document, make a copy of it, fill in the details, save it with a different name and use it. Make sure not to do any changes to the original cash memo format document.
If you don’t have MS Word, you can follow a similar procedure to create a cash memo format in Google Docs, which is a free source. All you need is a Google account to access G-Docs.
Cash Memo Format in Excel or Google Sheets
MS Excel has the edge over MS Word as it allows tables and formulas to auto-populate information. For instance, the total price of the products in a cash memo can be auto-generated by inserting a formula. Similarly, the date, tax rate, discount, etc., can be calculated automatically using an Excel sheet.
If you want to create a cash memo format in Excel, you can do it in a blank Excel Sheet by using any sample cash memo format as a reference.
If you don’t have access to Excel, you can also use Google Sheets to do the same. Google Sheets is a free source available to everyone having a G-mail account.
Cash Memo Format in PDF
To create a cash memo format in PDF, you should first create a cash bill format in Word or Excel using the above-mentioned details.
Once it is ready, you can download it as a PDF to view cash bill format in PDF. However, you cannot make any changes once the file is downloaded. Therefore, fill the cash memo format in Word with all the required details, and once you’re sure that the data entered is correct, you can download it as a PDF.
One advantage of using PDF cash memos is that the data cannot be edited or changed. Especially when sharing online, cash bills in PDF are safer than cash memos in Word and Excel. However, any cash memo format is fine when taking hard copies, i.e., as printouts.
The Pros and Cons of Using a Cash Memo
For small businesses, a cash memo is a handy tool to generate bills. Cash memo is simple to use and is easy to keep track of all sale transactions. A cash memo is a legal document and hence can be used for all bookkeeping and tax filings purposes.
No computers or other hardware is required as cash memos are handwritten. A cash memo is signed by an authorized person and hence is an authorised document. Cash memos are best for cash flow management as the business receives cash immediately after the sale. There won’t be any outstanding dues on the cash memos and hence making the working capital position of the business good.
The major drawbacks of using cash memos are that they can be easily manipulated as they are handwritten. They are not suitable for large enterprises as the sales take place on a larger scale.
Tax filing becomes difficult as everything needs to be done manually. For those vendors who need goods on credit, a cash memo cannot serve the purpose. More chances of errors in calculations due to manual filing and calculations. Cash sales on a large scale are often risky as it increases the instances of fraud and stealing.
Benefits of Using myBillBook to Generate Cash Memos
If your business is in a transition phase and when you’re upgrading your billing practices, you can look for alternatives to cash memos as they possess significant drawbacks. Choosing an efficient billing and account software is one such option available in today’s market. myBillBook is one such software that provides a variety of billing and accounting features that are GST compliant.
With myBillBook, choosing an ideal cash memo bill format for your business becomes highly convenient and efficient. Check out some of the benefits of using myBillBook for generating cash memos for your business:
- Downloadable formats: The templates available on myBillBook invoicing software are simple designs that you can easily download on your PC or mobile. You can also sync these devices to access cash memos on the go.
- Easy to print and share: Cash memos generated using myBillBook can be printed using a regular thermal printer. However, if you believe in reducing your carbon footprint, you can also share these memos online via emails and Whatsapp.
- Variety to choose from: You can select the cash memo bill format of your choice, among those available on myBillBook, as per the details you want to be included in it. These cash memos are suitable for all types of industries and businesses.
- Improved business efficiency: By managing your inventory in real-time and organising all your payables and receivables in one place, you can focus on other essential aspects of the business and improve your business efficiency to a significant extent.
- Other features: With myBillBook, you get access to many more accounting and billing features that can propel the growth and advancement of your business. These include invoice generator, quotation generator, proforma invoice generator, inventory management software, business reports, POS billing and a lot more.
Know more about Billing & Accounting Software for Small Businesses
- Open Source Accounting Software
- Sales Purchase Software
- Open Source Inventory Management Software
- Free Accounting Software
- Personal Accounting Software
- Mobile Bookkeeping App
- Mobile Accounting Software
- Accounting App
- Ledger Accounting Software
- E Invoicing Software
- Billing And Invoice Management Software