The official currency in Sri Lanka is Sri Lankan Rupee and its currency code is LKR and bank notes come in denominations of 10, 20, 50, 100, 200, 500, 1000, 2000 and 5000 rupees, and coins come in denominations of 1, 2, 5, and 10 rupees. The best way to get LKR is to withdraw cash from an ATM but withdrawing money in an ATM can be charged heavily according to their policy and your bank also may slap international transaction fee. Please, check with your bank for the fees before you depart.
Visa or MasterCard are widely accepted by tourist class hotels, restaurents and businesses but use of AmEx is very rare. Travellers’ cheques are not accepted in Sri Lanka. Almost every hotel do provide money exchange service, however, the rates are better in the banks or money changer outlets in the town.
There are still many shops and hotels who accept only cash. Small vendors may not accept foreign currencies. So, it's advisable to change some money at the airport first. There are banks and ATM in the major towns.
Most tours in Sri Lanka do not include admission tickets and activity fees such as jeep safari and you are required to pay in Sri Lankan money. So, please, consult your guide and plan ahead how much you need cash for the following day.