There are nu merous Accounting vouchers such as cheque book counterfoil, pay-in-slip counterfoil, wages, and salary sheet, receipt, invoice, bills, and many more used by an organisation. To be precise, one can say that any written document in support of the accounting entries in the books of account to indicate the accuracy of the transaction is said to be a voucher.
Vouchers in accounting can be any written document created in support of the entries in the accounting books and pose the accuracy of the accounting transaction. Vouchers are normally created to adhere to the control of accounting and financial transactions of any organisation.
What is voucher in accounting?
A voucher in accounting is a document normally issued by the accounts payable department to authorise payments. It can also be termed as a memorandum of liability to any organisation. An accounting voucher can be seen as a written backup document for the payments done to the suppliers or creditors in any organisation for the business conducted with the party.
This document plays an important role in initiating the process of clearance of liability. All the other related documents can be collected and verified with the use of a voucher. The accounting vouchers in tally also have a hand in putting up the appropriate con trol mechanism.
The accounts payable department has to ensure that every payment made to the supplier is,
- Authorised appropriately
- The goods and services are received against the payment
- The payment is as per the agreement that pre-exists
When a voucher is issued for payment, it implies that all these prerequisites of the control mechanism process are fulfilled, and the payment towards the supplier is good to go.
Also Read: Letter Of Authorization For GST
Components of Accounting Voucher
A voucher accounting is typically a part of a manual payment system with a strong control mechanism. The vouchers are prepared with the help of source documents such as challans, counterfoils, cheque books, receipts, bank deposit slips, bills, cash memos, and other information. The source documents are relevant to the financial transaction and also vouch for the existence of such transactions.
The data and information on a voucher normally contain are as mentioned below:
- Voucher number
- Date and types of accounting vouchers
- Credit and debit column
- Particulars column- It 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
Preparation of the accounting vouchers can be a tricky job. The accountant has to be vigilant while preparing the vouchers for the transaction that takes place. Every minute detail should be thoroughly checked and verified. Some of the major points that the accountant should take care of while preparing the voucher are mentioned below:
- The supporting documents should be thoroughly verified.
- An authorised signatory should sign the supporting documents of the voucher.
- The accountant should use appropriate types of voucher releva nt to the transaction.
- The credit and debit sides of the voucher should be tallied and balanced.
- It is most essential for the accountant to ensure that the voucher has the correct account head mentioned. This would ensure that the transaction is recorded properly in the books of accounts.
Types of accounting vouchers
Along with the knowledge about the meaning of vouchers in accounting, the accountant should also have thorough knowledge about the types of vouchers. This assists the accountant to prepare an appropriate voucher with regard and relevant to the financial transaction. Also, different types of vouchers have different meanings and implications.
The several types of vouchers are mentioned below:
1. Receipt Voucher
The bank or cash receipts are recorded through a receipt voucher. The receipt voucher is of two types, na mely bank receipt voucher and cash receipt voucher. A cash receipt voucher is prepared for the amount received in cash. The bank receipt vouchers record the receipt of the demand draft or cheque. This implies that the amount is received in the bank instead of cash.
2. Payment Voucher
The payment voucher is opposite to the receipt voucher. While receipt voucher poses the inflow of funds, payment voucher depicts the transactions that have an outflow of funds. The focus of preparing payment vouchers is to record the cash and bank transactions for payment in an organisation.
Similar to receipt vouchers, payment vouchers are also of two types: bank payment vouchers and cash payment vouchers. The payments in an organisation through cash are recorded in a cash payment voucher, while those done through demand draft or cheque are recorded in bank payment voucher.
3. Journal Voucher
Journal vouchers are also known as transfer vouchers or non-cash vouchers. All the transactions that do not involve cash or bank transactions or inflow and outflow of amounts are passed through journal vouchers. They are authentic documentary proof for the financial transaction.
For instance, when the goods are sold on credit and there is no immediate cash or bank transaction, the journal voucher is prepared for such a transaction. The debtor is debited with the sales amount, and the sales account is credited to pass the accounting entry.
4. Sales Voucher
Any sales transaction for the goods and services is passed through a sales voucher. The sales voucher is prepared to record the cash and credit sales performed in the organisation. The relevant debtor account is debited, and the sales account is credited. The sales voucher is the proof and acts as evidence of the sales transaction for goods and services in the organisation.
5. Purchase Voucher
Purchase voucher records the transaction of purchase of goods and services in an organisation. The purchase transaction may be through cash or bank or on credit. The relevant supplier is credited when the purchase happens on credit. The purchase voucher is supported through several relevant documents such as purchase order, supplier slip, and other documents relevant to the required purchase.
6. Supporting Voucher
Any transaction that has been undertaken in the organisation in the past is documented through a supporting voucher. It is written documentary proof for the past events in an organisation. For example, to support the main voucher, supporting vouchers are attached with the expense bill. Supporting vouchers such as fuel bills can act as proof of the transportation of an employee.
Why are accounting vouchers prepared?
When an organisation receives an invoice from a supplier, and there is a liability of payment, then the accountant has to essentially make a voucher in accounting. The vouchers act as the supporting documents with regards to any payment done and the ledger file.
Also, accounting vouchers are deemed the source document and p rove that the business organisation has performed the financial transaction. Therefore, they play a vital role in the audit trail process of the organisation. The external auditors treat the vouchers as a piece of audit evidence. The transactions of the organisation can be easily controlled and tracked with the use of vouchers.
Process of using accounting vouchers
The payment towards goods and services is not done immediately. It is usually due at a certain future date. A delay of thirty, sixty, or ninety days is normally allowed for payment. So when the organisation receives services or goods, they issue an accounting voucher as a reminder for the payable amount.
There is a certain process followed for creating a voucher. This is mentioned below:
- An order for goods or services is placed to the supplier.
- The supplier acknowledges, confirms, and approves the order.
- The authorised person verifies that the goods and services received are as per the terms of agreement or contract.
- According to the transaction, the voucher is created. It contains all the related and relevant information about the transaction. The documents in support of the transaction are also attached to the same.
- The organisation makes the payment after thoroughly checking the voucher and the supporting documents and information.
The accounting vouchers contain all the related and relevant data and information about the transaction. There are numerous documents attached to the accounting voucher. Some of the major documents are mentioned below:
- The invoice from the supplier for the goods and services
- Basic details of the supplier such as telephone number, address, name, bank details, and others.
- Details about the payment due such as amount, any discount, due date, and other details.
- Purchase order details.
- Confirmation of receipt stating that the goods or services are received as per the agreement and the invoice.
- General ledger account to support the accounting purpose.
- Authorised signature to confirm and validate the purchase and the payment. This can be any person who is authorised and is in charge of the transaction.
- Voucher documentation or the proof for the payment done.
Benefits of accounting voucher
Maintaining vouchers is mandatory for the smooth and appropriate functioning of the payment process of any organisation. It is a document of proof in any legal process and acts as the same in the verification process during an audit.
Some of the major benefits of creating and maintaining vouchers are mentioned below:
- The accounting voucher in tally or any other software is a vital part of having strong control over the process of payables.
- If a voucher is intact, then several invoices can be paid together. This, in turn, reduces the number of cheques used and issued.
- When the vouchers are pre-numbered, it simplifies the process of an audit trail in payables.
- There is proper segregation between the two important processes of invoice payment and invoice approval. This makes the payment plan easier and optimises productivity.
- If the voucher is issued, it implies that the goods and services are received to the mark and as per the pre-existing agreement.
- It also defines that the payment is authorised to be made.
Importance of accounting vouchers
Accounting vouchers have an important role in every kind of audit process and control mechanism. The veracity of the data and information in an organisation's financial statements are verified and authenticated through the audit procedures. With the vouchers in place, it becomes simple and easy to conduct the audit process and authenticate the transactions. Vouchers are requisite and justification for the documents of the transaction that are performed in the organisation.
The control and trail of the transactions in the organisation are also performed through the vouchers. It reduces the risk of any kind of misconduct in an organisation. The vouchers are a kind of paper trail that relates to the transaction, the person involved in it, the tasks associated with the people. Thus, the vouchers create a sense of responsibility amongst the employees and the people involved with the transaction.
Also Read: Cash Memo Template
Accounting Vouchers are very important for the sustainability of every organisation. It records and tracks financial transactions and ensures compliance with the law. Also, the accounting vouchers keep the organisation managed and organised properly and ready for any kind of audit and ensure control. Different types of accounting vouchers can be used as per the requirement to fulfil the need at hand. Therefore, we hope you now have a clear understanding of such vouchers and their significance within a company. The Biz Analyst app proves to be beneficial in this regard. You can create receipts and payments for accounting securely, along with staying connected to your business and ensuring sales growth.