Set Up a Cash Journal to Enhance Your Internal Controls

  • by Kees van Westerop, Senior SAP Consultant, Kwest Consulting
  • November 15, 2006
See how to set up a cash journal and how to use it to record cash transactions and monitor your cash position.
Key Concept

Many companies have a petty cash account for small cash payments and receipts. To integrate petty cash with the SAP R/3 system, SAP developed the cash journal. The cash journal enables a company to keep track of all the cash transactions per currency and to integrate them in the G/L, A/R, and A/P.

SAP developed the cash journal to keep track of petty cash receipts and payments. This functionality has been available since Release 4.0 of SAP R/3. As the cash journal is a one- screen transaction, using it is simple. It considerably improves a company’s internal control, because you can record all transactions in the system and can reconcile the actual cash amount with the balance of the cash G/L account easily.

However, it isn’t included in any ready-to-run systems and not many users know about it in any detail. Often it is lumped under Treasury and “advanced finance” when really it’s a bread-and-butter function that all companies could benefit from using.

To explain how to set up a cash journal and register cash journal transactions, I set up a basic example in the SAP IDES environment. My example was created in mySAP ERP Central Component (ECC) 5.0. Not all of the options are available in R/3 releases before 4.70; however, the main functionality is the same.

Kees van Westerop

Kees van Westerop has been working as an SAP consultant for more than 25 years. He has an MBA degree in mathematics and a degree in finance. Kees has been concentrating on the financial modules, especially in general ledger accounting, cost center accounting, and consolidation. He also has a great deal of experience with rollouts of kernel systems and integrating finance and logistics.

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