What is a Voucher: Benefits, Types and Components
A voucher in accounting is a document that proves a financial transaction has taken place. It helps businesses keep track of money received or paid and ensures that every transaction is properly recorded. There are different types of vouchers, such as receipt vouchers, payment vouchers, journal vouchers, contra vouchers, debit vouchers, credit vouchers, sales vouchers, and purchase vouchers. Each type plays a unique role in maintaining clear, accurate financial records. In this blog, you’ll understand the core concepts of vouchers, learn how each type works in real-life business situations, and discover why vouchers are essential for accounting, auditing, and compliance. Whether you’re a student, accountant, or small business owner, this guide will help you grasp everything you need to know about accounting vouchers in a simple and clear way.
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What is a voucher?
An accounting voucher is a document supporting the accounting book entries. Once the supplier receives the payment, the voucher is marked as ‘paid,’ and the payment is recorded in the relevant ledger accounts. Accounting vouchers help maintain better control over payments. They can also be pre-numbered, making it easier to audit the records.
What are the benefits of a voucher?
Here are a few benefits of maintaining vouchers:
- Vouchers help businesses keep better control over the payables process.
- With vouchers, several invoices can be paid simultaneously, reducing the number of cheques.
- It can be pre-numbered and facilitates the payables audit trail.
- Invoice approval is segregated from invoice payment to optimise productivity and make planning easier.
- The collection of invoices shall be made by the cashier, who will report it to the treasurer.
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Types of accounting vouchers
Here are some of the most common types of vouchers.
- Receipt Voucher
A receipt voucher is used to record cash or bank receipts. A cash receipt voucher contains information regarding the receipt of cash in hand. On the other hand, the bank receipt voucher indicates receipt of a cheque or DD (demand draft), meaning the money is not received in cash; all the transactions have been done through bank transfers, checks, or DD. - Payment Voucher
A payment voucher is the opposite of a receipt voucher, as the receipt voucher depicts the inflow of funds, while a payment voucher represents the outflow of funds. There are two different types of payment vouchers: cash payment vouchers and bank payment vouchers. A cash payment voucher indicates all cash payments, while the latter shows payments made by cheque or demand draft.
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- Journal Voucher
A journal voucher is used for all non-cash transactions and serves as documentary proof. For instance, after goods are sold on credit, the cash or bank account is unaffected. The voucher will debit the debtor to whom the goods are sold on credit, and the sales on the credit account will be credited. - Contra Voucher
A contra voucher records internal transfers between accounts, such as depositing cash into a bank account. This voucher doesn’t affect the overall financial position, but it helps monitor account balances.
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- Debit Voucher
A debit voucher records expenditures or amounts owed by the business. It’s used for credit purchases or account adjustments, simplifying expense tracking. - Credit Voucher
Credit vouchers are used when the business receives credit, such as for refunds or returns. They help adjust accounts and keep track of money owed or refunded. - Stock Voucher
A stock voucher records goods in and out of the business, including inventory received, sold, or transferred between different locations. This voucher ensures that the inventory records remain accurate and up to date.
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- Expense Voucher
Expense vouchers contain business-related expenses, such as office supplies, travel, and bills. It includes the amount spent and a description of the cost. These vouchers help businesses maintain accurate records of financial transactions, ensuring everything is documented and tracked correctly.
What are the Components of a Voucher?
A voucher usually contains the following information:
- Supplier identification number
- The amount payable
- The date on which payment will be made
- The accounts payable to record the liability
- Any valid early payment discount terms
- The approval signature or stamp
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How to prepare an accounting voucher
An accountant has to prepare accounting vouchers for a company using the source document, which is the papers associated with a business transaction.
Such documents include cash memos, bills, bank deposit slips, receipts, chequebook counterfoils, challans, and other information demonstrating the existence of a transaction in an organisation. A voucher usually contains the following information.
- Serial number of voucher
- Type and Date of Voucher
- Debit and Credit Column
- Amount in both figures and words
- Total Column
- Particulars column (a brief description of the transaction)
- Signature of accountant
- Signature of manager or authorised person
- Signature of receivers in case of bank payment voucher or cash payment voucher
Conclusion
Every company requires an accountant who can prepare vouchers for accounting purposes. These recordings are essential for any business to track income and expenditures and ensure statutory compliance.
Accounting is essential in every organisation, even a small business. Accounting can keep everything organised and support all tax return claims. BUSY is an all-in-one accounting software that simplifies voucher recording and offers insightful reports.
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
Frequently Asked Questions
- What is a class 11 voucher?In BUSY, Class 11 vouchers refer to inventory-related vouchers such as Material In, Material Out, Production, and Rejection. These help track stock movement, production processes, and inventory adjustments, making it easier for businesses to manage raw materials, finished goods, and job work efficiently within the accounting system.
- What can be a cash Voucher?A cash voucher is used to record transactions involving cash payments or receipts. In BUSY, cash vouchers include Cash Payment and Cash Receipt. These are used when money is received or paid in cash, helping to track cash flow and maintain accurate financial records in the system.
- What is the main function of a voucher in double-entry accounting?In double-entry accounting, a voucher records financial transactions with both debit and credit entries. In BUSY, vouchers ensure each entry is balanced and traceable. They form the base of accounting records, helping businesses track income, expenses, assets, and liabilities accurately and comply with auditing and tax requirements.
- Which voucher is used for adjusting journal entries?In BUSY, the Journal Voucher is used for adjusting entries. It helps record non-cash transactions like depreciation, provisions, or corrections. Journal Vouchers ensure proper allocation of income and expenses, maintain accounting accuracy, and reflect the true financial position of the business at the end of a period.
