What is a Daybook? Uses, Types, Advantages and Disadvantages

A daybook is a source document to create bookkeeping records of an entity. It records all the bookkeeping transactions of a business chronologically.

Manual daybooks are rarely used these days and are challenging to create but they offer several benefits to a reporting entity.

Let us discuss what is a daybook, what are its uses for a business, and what are the advantages or disadvantages of a daybook.

What is a Daybook?

A daybook or the book of original entries is a book used by an entity to record initial accounting transactions as and when they occur.

These transactions are recorded without categorization and any specific account types. These transactions are recorded chronologically to record the date and amount only.

The recorded transactions on a daybook serve as the record log for accountants. They use these recorded entries to create journal entries for each account.

The journal entries are then summarized and transferred to create adjusted trial balances. These entries then form the basis of the financial statements of the reporting entity.

It means a daybook lays the foundation of bookkeeping for an organization. However, daybooks are only used where manual bookkeeping systems are in place.

Why Businesses Use a Daybook?

Daybooks are rarely used these days in the form of paper books. Accounting and bookkeeping software records the accounting transactions and creates the general ledgers directly these days.

When used separately, a daybook sets the basics of the bookkeeping system of a business. It is used to record all the details of a transaction chronologically as it occurs.

A business can then use this daybook data to categorize accounts and transfer the information to the general ledger.

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Managers and auditors can use the daybook entries to trace accounting irregularities as well as track transactions for detailed reporting.

Bookkeeping software can serve the same purpose of recording daybook transactions in detail. The only difference will be that records will be recorded digitally instead of paper books.

Either way, a detailed log of bookkeeping entries is useful for creating comprehensive accounting records for a business.

Types of Daybooks

There are several types of daybooks that a business can use. Growing businesses can use multiple daybooks for detailed bookkeeping records while a small business can use a combined daybook for all records.

Sales Daybook

It is used to record all sales transactions of a business. It is also called a sales journal.

A sales daybook only records sales made on credit and a separate journal is used for cash transactions usually.

Purchase Daybook

This journal is used to create records of purchases made by a business. This book also records only credit transactions.

A purchase journal is usually used to record the inventory and product purchases of a business.

Cash Daybook

As the name suggests, this daybook records all the cash transactions of a business.

Cash transactions include sales, purchases, operational expenses, receipts, and payments of a business.

General or Multiple Daybook

A general or multiple daybook is used by an entity to record all cash or credit transactions that cannot be recorded on a specific book.

Usually, growing businesses with several adjusting or transfer accounting entries use this type of general daybook.

Format of a Daybook

A daybook does not come with a specific format or template. A reporting entity can customize the columns and add or delete information as needed.

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The most commonly used components of a daybook include the following.

Transaction Date

A daybook is a chronological record of bookkeeping entries. Therefore, the first column is always for the transaction date entries.

Reference Number

A reference number for each transaction is recorded in the second column. It makes tracking of bookkeeping entries easier.

Transaction Details

This is a detailed column where all transaction details are recorded. These details may include the classification of accounts, credit or cash identifier, and any other instructions relevant to the transaction for both parties.

Counter Party

In this column, the name of the counterparty is recorded. These are usually supplier names to identify transactions easily.


This column includes the gross or net amount of the transaction. If there are tax or other frequent adjustments, a daybook may contain two columns for gross and net amounts.

Ledger Account Reference

This column can be created to record ledger account references. It makes the classification of raw entries into journal entries easier.


This is an additional column that can be used to record additional entries like taxes, charges, premiums, and accounting adjustments before recording the net amount of each transaction.

General Ledger vs. Daybook

A general ledger is not a type of daybook in accounting systems, it is a separate book that contains the master record of all accounts.

A daybook is the collection of raw data or bookkeeping transactions of an entity. It does not specify entries into accounts and only records them by date.

A general ledger is a collection of summarized accounts used by an entity in a bookkeeping system. These accounts are processed from the general journals created from daybooks.

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It means a general ledger derives information from a daybook indirectly through journals and adjusted trial balance records.

Advantages of Using a Daybook

The use of a manual daybook is diminishing, however, it offers several benefits to a business.

  • It creates a comprehensive record book of a business by recording all transactions.
  • It sets the foundation of bookkeeping records like journals, general ledgers, and financial statements.
  • A chronological record makes it easier to categorize transactions.
  • Managers and auditors can use daybooks to trace accounting errors and also fetch valuable information to create detailed financial reports.

Disadvantages of Using a Daybook

Whether used in the manual or digital format, a daybook comes with some limitations too.

  • Recording every transaction in a daybook is a time-consuming activity.
  • Transferring and categorization of bookkeeping data from daybooks to general ledgers is a tedious task.
  • Tracing and tracking transactions in a bulky record book is a challenging task.
  • It’s challenging to achieve accuracy and consistency with manual daybooks.
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