MunshiA khata records who owes whom, a cash book records the cash you receive and pay, and a bank book records the money moving through your bank accounts. They look similar, which is why beginners mix them up, but each answers a different question. A small business that gives credit, handles cash and has a bank account needs all three.
The three books at a glance
| Book | It answers | What goes in |
|---|---|---|
| Khata (ledger) | Who owes me, and whom do I owe? | Credit given, payments received from or made to a person |
| Cash book | How much cash should I have in the drawer? | Every cash receipt and every cash payment |
| Bank book | How much is in each bank account? | Deposits, withdrawals and transfers per account |
The khata: people and balances
The khata is organised by person. Each customer or supplier has their own balance. It is about promises: “Ali owes me Rs 3,500” is a fact about Ali, even if no cash has moved. Use it for credit. See how to manage udhaar digitally.
The cash book: the drawer
The cash book is organised by day. It records only real cash moving: a cash sale, a payment received, rent paid, stock bought. Its balance should match the cash you can count. If it does not, there is a missing or wrong entry. See cash in and cash out: how to choose a cash book app.
The bank book: each account
The bank book is organised by account. Each bank account has its own deposits and withdrawals, and its balance should match the bank’s statement. Keeping it separate from the cash book stops bank money and drawer cash from getting mixed.
A worked example
On one day, a shop does the following:
- Sells goods for Rs 2,000 cash. Cash book: in Rs 2,000.
- Sells goods for Rs 3,500 on credit to Ali. Khata: Ali owes Rs 3,500. The cash book does not change.
- Ali pays Rs 1,000 in cash. Khata: Ali now owes Rs 2,500. Cash book: in Rs 1,000.
- Pays Rs 5,000 rent in cash. Cash book: out Rs 5,000.
- Deposits Rs 10,000 to the bank. Bank book: in Rs 10,000. The cash taken out of the drawer also leaves the cash book.
Each event shows up in the book that answers the question it affects. That is the whole idea.
Common mix-ups
- Counting a credit sale as cash. Until the customer pays, it is only in the khata.
- Recording a bank deposit as a sale. It is a movement of money you already have. Record the sale when it happens.
- Skipping the cash book because “the khata has it”. The khata does not know about your cash sales or your rent.
All three in one app
Munshi keeps the customer and supplier ledger, a Cash Book, a Bank Book with a total bank balance, and expenses with categories, all offline and in Urdu or English. Reports then pull the pieces together for any dates, as PDF or Excel. For a deeper look at spending, read how to track business expenses in Pakistan, and for the supplier side, how to track what you owe suppliers.