A voucher is proof that a financial transaction has been made. It helps us track how much money is received or paid, and it ensures that every transaction is recorded correctly. Many types of vouchers are available in the market, like receipt vouchers, payment vouchers, journal vouchers, contra vouchers, debit vouchers, credit vouchers, sales vouchers, and purchase vouchers. The goal of each voucher is to make accurate financial statements. Vouchers play an important role in the accounting and auditing process. In this blog, we will discuss every concept related to vouchers.
What is an Accounting Voucher?
Vouchers in accounting can be defined as any written document written in support of the entries in the accounting books. This document determines the accuracy of our accounting transaction recording in any organization and is also referred to as a memorandum of liability to any organization. Vouchers are very important to initiate the process of clearing liabilities. The Tally accounting vouchers also play a role in implementing the appropriate control mechanisms.
Vouchers are usually sanctioned by the accounts payable department for authorizing payments. Each voucher contains a serial number and the corresponding source document. This serial number will help auditors file and vouch for them. Source Documents are documents that capture the key details of business transactions. The source document contains the party name, transaction date, transaction amount, and transaction nature.These documents are later used to prepare records like accounting vouchers. So, remember that when someone asks, “What is an accounting voucher?” it simply means a record made from source documents to show that a transaction has occurred.
What are the Components of Accounting Vouchers?
Vouchers are prepared using source documents such as cheque books, receipts, bank deposit slips, bills, challans, counterfoils, cash memos, and other information.The information on a voucher normally contains are as mentioned below:
- Voucher number
- Date and types of accounting vouchers
- Credit and debit column
- The particulars column includes a brief description of the record of the transaction
- Identification Number of the supplier
- The amount payable in words and figures
- Column for total
- The due date for payment
- Name of the account under which liability is created
- Terms and conditions for a discount or other schemes
- Approval stamp and signature of accountant
- Authorised signature of the higher authority
- Receiver’s signature
Types Of Vouchers
There are different types of vouchers available. The accountants must be aware of all these voucher types. They are listed below:
Receipt Voucher
A receipt voucher is used to record cash or bank receipts. You should understand that the cash receipt voucher records the receipt of cash, whereas the bank receipt voucher records the receipt of a cheque or DD (Demand Draft).
Payment Voucher
A Payment Voucher is the exact opposite of a Receipt Voucher. Here, there are cash payment vouchers and bank payment vouchers. A cash payment is made in cash, whereas a bank payment is made by cheque or DD (Demand Draft).
Journal Voucher
A journal voucher is also known as a transfer voucher or a non-cash voucher. Here, no cash/bank transaction is happening, but it serves as documentary proof. For example, in this record, the customer’s name is written on the debit side because they owe you money, and the sales account is written on the credit side because you made a sale. It simply shows that you sold goods, but the payment will come later.
Contra Voucher
A contra voucher is focused on making an internal transfer between accounts, such as depositing cash into a bank account. This voucher is mainly used for monitoring the account balances.
Debit Voucher
A debit voucher is usually issued when a business spends money or pays someone. It is used when buying goods on credit or recording expenses. This voucher helps to keep track of money going out.
Credit Voucher
A credit voucher is issued when a business receives money back or when someone owes the company. It is commonly used for refunds, returns, or other money coming in. It also helps us to keep track of funds received.
Stock Voucher
A stock voucher records goods going in and out of the business. This includes inventory received, sold, or moved between different locations. This makes a financial statement remain accurate.
Expense Voucher
This voucher includes all expenses related to the businesses. This includes the amount spent and a brief description of the cost. The main goal is to track expenses and maintain accurate records of financial transactions.
Supporting Voucher
Any past transaction can be documented with a supporting voucher. It will act as proof for a past expense. For example, to support a main voucher, we can also add a supporting voucher. If a person is charged for fuel bills as a supporting voucher, then it is proof that the employee has indeed transported.
What Is The Purpose Of Accounting Vouchers?
Just imagine that if a company has a liability to pay a supplier, the accountant must record this transaction by issuing an accounting voucher. If you’re wondering what is an accounting voucher, it is a document used to record and support every financial transaction made by the business. This voucher will remain as proof of a financial transaction. As a result, external auditors treat these records as audit evidence. The entire transaction, in and out of the company, is recorded through these vouchers, allowing transactions to be tracked.
How An Accounting Voucher is made?
There is a series of steps for making an accounting voucher. They are listed below:
- First, order some goods from the supplier.
- The supplier accepts the order.
- Verification of goods is done by an authorized person.
- According to the transaction, the voucher is created with all required supporting documents.
- The organization pays money after reviewing this accounting voucher and all other details.
Various Benefits of Accounting Vouchers
There are numerous benefits to these accounting vouchers, as listed below.
- Vouchers are a great way to keep better control over the payables process.
- It will reduce the burden of more cheques as they can be paid simultaneously.
- Each voucher has a unique number, making it easy for auditors to check transactions.
- Invoice approval and invoice payment are handled differently to increase efficiency.
- The cashier will collect the invoices and then report them to the treasurer.
In software like Tally accounting voucher, all these processes become even simpler, as Tally helps record, organize, and track every financial transaction digitally with accuracy and ease.
Pros and Cons Of Accounting Vouchers
Some of the Pros and Cons of accounting vouchers are listed below in a table
| Pros | Cons |
| Ensures accuracy | Time-consuming |
| Keeps records organized | Creates paperwork |
| Provides an audit trail | Can be complex |
| Ensures accountability | Costs extra |
| Helps with compliance | Risk of loss/damage |
Suppose you are learning about vouchers and want to build a career in finance. In that case, there are many accountant job vacancies in Kerala and Bangalore where knowledge of vouchers can help you get a good position in reputed companies.
Conclusion
Every company needs an accountant who can prepare vouchers in order to record financial transactions. To track the company’s income and expenditure, it is essential to ensure statutory compliance. It is essential to keep all financial matters organized to support the company’s growth and ensure statutory compliance. Use various types of vouchers as appropriate. When we are properly documenting vouchers, it enables easy verification of all goods and services purchased, sold, and returned. Vouchers can also help reduce the unauthorized use of the company’s assets. If you want to learn about vouchers, join several accounting courses available at Finprov.
FAQs
1. What does an accounting voucher do?
It records details of any money-related activity in a business.
2. When is a voucher made?
Whenever money is received, paid, or adjusted.
3. What are examples of accounting vouchers?
Cash voucher, debit voucher, credit voucher, and journal voucher.
4. Why should a business use tally accounting vouchers?
To keep clear and accurate financial records.
5. Can vouchers be used as proof?
Yes, they act as proof of every financial transaction.
