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
- How to Create Vouchers in BUSY?To create vouchers in BUSY, follow these steps:
- Go to the Transactions menu.
- Select the voucher type where you want to make an entry (e.g., Sales, Purchase, Payment, Receipt).
- Click on “Add” to enter voucher details and save the entry.
- How many types of Vouchers are available in BUSY?Vouchers in BUSY are categorized into three groups:
- Accounting Vouchers: Payment, Receipt, Contra, Journal, Debit Note, Credit Note.
- Pure Inventory Vouchers: Stock Transfer, Stock Journal, Production, Unassemble.
- Dual Vouchers: Sales, Sales Return (Credit Note), Purchase, Purchase Return (Debit Note).
- How to Create Bulk Payment Vouchers in BUSY?To create payment vouchers in bulk, follow these steps:
- Open your company and go to the Administration menu.
- Select Bulk Updations, then click on Bulk Payments.
- Choose either Amount Payable or Bills Payable, enter the date, and click the down arrow to fetch details.
- Select the Voucher Type, Series, Date, and set Y on Clear Full (or modify the amount as required).
- Click on Save, and the system will post the payment vouchers in bulk.
- How to Enable Automatic Voucher Numbering in BUSY?To set up automatic voucher numbering, follow these steps:
- Go to Administration, then click on Configuration.
- Select Voucher Series Configuration and choose the voucher type (e.g., Sales, Purchase).
- Select the required voucher series, then click on Voucher Numbering.
- Choose Numbering Type as Automatic or Manual.
- If selecting Automatic, set the prefix, suffix, and starting number as needed.
- Click OK to save the settings.
Note: Always back up your data before making changes.
- How to Avoid Duplicate Vouchers in BUSY?To prevent duplicate vouchers, configure automatic numbering as follows:
- Open the Administration menu and select Configuration.
- Click on Voucher Series Configuration and select the voucher type (e.g., Sales, Purchase).
- Choose the voucher series, then click on Voucher Numbering on the right side of the screen.
- Set the Numbering Type to Automatic and configure the settings (prefix, suffix, starting number, etc.).
- Save the settings and click No when prompted to renumber all vouchers in the series.
Note: Ensure you have a recent data backup before making any changes.
