Free Proof of Cash Excel Template
A ready-to-use proof of cash workbook with built-in variance formulas. Reconcile bank activity to the books month by month, the way diligence teams do it. No email required.
What a proof of cash is
A proof of cash is a reconciliation that ties the cash a bank actually recorded to the revenue and expenses a company recorded in its books, one month at a time. Where a standard bank reconciliation only checks the ending balance, a proof of cash checks the flow: deposits against booked revenue, and disbursements against booked expenses.
That makes it one of the highest-signal tests in financial due diligence. If a seller has recognized revenue that never arrived as cash, or moved cash without recording an entry, the variance rows surface it. Diligence teams run a proof of cash early because it validates the books against an independent source before deeper analysis builds on those numbers.
What's in the template
- Instructions tab with numbered steps, so anyone on the deal team can pick it up cold
- Proof of Cash tab with one column per month, January through December, plus a Total column
- Input rows for the beginning bank balance, bank statement deposits and disbursements, and book revenue and expenses
- Built-in deposit and disbursement variance formulas, each calculated as books minus bank
- A reconciling items section: deposits in transit, outstanding checks, bank fees not booked, transfers between accounts
- An unexplained variance row that reads zero once every reconciling item is captured
- An ending bank balance row: beginning balance plus deposits minus disbursements
- Worked sample data in January and February so the formulas are visible before you enter your own numbers
How to use it
- Enter one column per month on the Proof of Cash tab. Yellow cells are inputs; gray cells hold formulas.
- Pull deposit and disbursement totals for each month from the bank statements.
- Pull revenue and expense totals for the same months from the general ledger.
- Review the deposit variance and disbursement variance rows. They show where the books and the bank disagree.
- Enter the reconciling items that explain each variance: deposits in transit, outstanding checks, bank fees not yet booked, and transfers between accounts.
- Check the unexplained variance row. It should read zero once every reconciling item is captured. Anything left over deserves a closer look.
What a template can't catch
A spreadsheet proof of cash works well for a single operating account and a manageable number of transactions. It gets impractical fast when the target runs multiple bank accounts, high transaction volume, or messy intercompany transfers. At that point the risk shifts from the seller's books to your own keying errors.
Zenith runs a proof of cash automatically from bank and accounting data as part of every financial due diligence report, alongside quality of earnings analysis and red-flag detection. If the deal is big enough that this template feels slow, that is the signal to automate.
See how Zenith FDD worksFrequently asked questions
What is a proof of cash?
A proof of cash is a month-by-month reconciliation of the cash activity a bank recorded against the revenue and expenses recorded in the books. It compares deposits per the bank statement with booked revenue, and disbursements with booked expenses, then flags any difference that reconciling items cannot explain.
How is a proof of cash different from a bank reconciliation?
A bank reconciliation ties a single ending balance on the bank statement to the balance in the books at one point in time. A proof of cash goes further: it reconciles the full flow of deposits and disbursements across each month, so it can catch revenue recognized without cash arriving and cash that moved without a matching entry in the books.