What Is a Voucher in Accounting? Types, Journal Entries & Format

A voucher is a written document that records, supports, and authorises a financial transaction in the books of account . Every ledger entry should be backed by a voucher, whether it is a payment to a supplier, a receipt from a customer, or a year-end adjustment such as depreciation.

A voucher usually answers four basic questions. What was the transaction? Who was involved? When did it happen? Who checked and approved it? Because of this, vouchers are an important part of proper bookkeeping and financial control.

In practice, a voucher is normally supported by other documents such as bills, receipts, invoices, bank advice, or internal approval notes. No transaction should be entered in the books unless it is backed by a correctly prepared and authorised voucher.

Proof of Every Transaction

A voucher acts as documentary proof that a transaction took place. If a business needs to explain why money was paid, received, or adjusted in the books, the voucher and its supporting document provide the answer.

Better Audit Trail

Pre-numbered vouchers create a clear sequence of records. This helps auditors trace any ledger entry back to the original transaction. Companies are also expected to keep proper supporting records for transactions under the Companies Act, 2013.

Better Internal Control and Fraud Prevention

Vouchers help create a checking process within the business. In many cases, one person prepares the voucher, and another person approves it. This reduces the risk of unauthorised payments or unsupported entries.

GST and Tax Compliance

For GST-registered businesses , vouchers support proper accounting and tax records. For example, purchase vouchers backed by valid GST invoices help support Input Tax Credit claims , subject to the conditions of the CGST Act, 2017.

Easier Payment Processing

A voucher can also simplify accounting work. One payment voucher may cover several invoices, making the payment process easier and reducing unnecessary duplication in records.

1. Payment Voucher

A payment voucher records every outflow of money from the business, whether paid in cash or through the bank. It is often called a debit voucher because the relevant expense, liability, or asset account is debited.

Payment vouchers are commonly used for rent, salaries, utility bills, supplier payments, loan repayments, and professional fees.

There are two common types of payment vouchers. A cash payment voucher is used when payment is made in cash. A bank payment voucher is used when payment is made by cheque, NEFT, RTGS, or UPI.

Journal Entry Example - Rent Paid by Cheque

Journal Entry Example - Salary Paid in Cash

(Being salary paid to Ramesh Kumar for March 2026)

2. Receipt Voucher

A receipt voucher records every inflow of money into the business. It is the opposite of a payment voucher and is also called a credit voucher.

Receipt vouchers are commonly used for customer payments, advance receipts, rental income, and interest received.

A cash receipt voucher is used when cash is received. A bank receipt voucher is used when money is received by cheque, demand draft, NEFT, RTGS, or UPI.

Journal Entry Example - Customer Pays by Bank Transfer

(Being payment received from Priya Traders against Invoice No. ST/2026/112)

3. Purchase Voucher

A purchase voucher records the purchase of goods or services, whether for cash or on credit. It is one of the most commonly used vouchers in trading, manufacturing, and retail businesses.

Purchase vouchers are used when buying raw materials, finished goods, consumables, machinery, or services.

Journal Entry Example - Goods Purchased on Credit

(Being 100 kg of fabric purchased from Sharma Textiles at 18% IGST on credit)

Journal Entry Example - Goods Purchased for Cash

(Being stationery purchased for cash)

Note: Input Tax Credit can be claimed on a purchase voucher only when the purchase is supported by a valid GST invoice, the goods or services are used for business purposes, and other legal conditions are met. Certain purchases are blocked under Section 17(5) of the CGST Act.

4. Sales Voucher

A sales voucher records the sale of goods or services, whether for cash or on credit. It is prepared when the business makes a sale and usually goes along with the invoice.

Sales vouchers are used for cash sales, credit sales, and service income.

Journal Entry Example - Goods Sold on Credit

(Being LED panels sold to Rahul Electronics at 18% GST on Invoice No. SE/2026/045)

Journal Entry Example - Cash Sale

(Being goods sold for cash at 18% GST)

5. Journal Voucher

A journal voucher records non-cash and adjustment entries. It is used when no cash or bank is involved directly in the transaction.

Journal vouchers are commonly used for depreciation , provisions, year-end adjustments, GST set-off, opening balances, and correction entries.

Journal Entry Example - Depreciation

(Being depreciation charged on machinery at 10% p.a. for FY 2025-26)

Journal Entry Example - GST Set-Off

(Being IGST input tax credit set off against IGST liability for March 2026)

6. Contra Voucher

A contra voucher records internal transfers between the business's own cash and bank accounts. It does not involve any outside party.

It is used when cash is deposited into the bank, cash is withdrawn from the bank, or money is transferred between the business's own bank accounts.

A contra voucher should not be used when an external party is involved. In that case, a payment voucher or receipt voucher is used instead.

Journal Entry Example - Cash Deposited into Bank

(Being cash collected from shop counter deposited into Axis Bank on 20-Mar-2026)

Journal Entry Example - Cash Withdrawn from Bank

(Being cash withdrawn from SBI for office petty expenses)

7. Debit Note Voucher

A debit note voucher is generally used from the buyer's side when goods are returned to the supplier or when the supplier has charged more than agreed.

It is important not to confuse a debit note with a debit voucher. A debit note is a formal return or adjustment document, while a debit voucher is simply another name sometimes used for a payment voucher.

Journal Entry Example - Goods Returned to Supplier

(Being 10 kg defective fabric returned to Sharma Textiles, Debit Note No. DN/2026/008)

In GST terms, a purchase return may affect Input Tax Credit depending on the nature of the transaction and documentation.

8. Credit Note Voucher

A credit note voucher is used from the seller's side when goods are returned by the customer, when there is a post-sale discount, or when a downward price revision is made after the sale.

Journal Entry Example - Goods Returned by Customer

(Being goods returned by Rahul Electronics, Credit Note No. CN/2026/003 issued)

Under GST, credit notes must be issued within the time limits prescribed by law and reported correctly in GSTR-1.

9. Petty Cash Voucher

A petty cash voucher records small routine cash expenses that are too minor for normal payment processing. These may include tea, stationery, courier charges, local travel, or cleaning items.

Petty cash vouchers are usually maintained by the petty cashier and recorded in a petty cash book.

Journal Entry Example - Tea and Stationery

(Being tea Rs. 150 and stationery Rs. 200 purchased from petty cash on 18-Mar-2026)

Many businesses use the imprest system for petty cash. Under this system, a fixed amount is given to the petty cashier and restored whenever it runs low.

10. Stock Journal Voucher

A stock journal voucher records the movement of goods within the business where no direct cash or bank transaction takes place. It is mainly used by manufacturers, traders with multiple godowns, and businesses handling inventory transfers or stock adjustments.

It may be used for stock transfers between locations, delivery before invoicing, receipt before invoice entry, or adjustments after physical stock count.

Journal Entry Example - Transfer Between Godowns

(Being 500 units transferred from Mumbai to Delhi godown on 19-Mar-2026)

(Being 500 units transferred from Mumbai to Delhi godown on 19-Mar-2026)

A standard accounting voucher in India should include all the essential details required for accounting, auditing, and verification.

Sample Payment Voucher Format

There are three simple rules for voucher preparation:
1. Do not leave the narration blank.
2. Attach the supporting bill, receipt, or invoice.
3. Use a proper serial number for each voucher type in each financial year.

Many business owners, especially those new to accounting, confuse vouchers with invoices. However, they are different documents and serve different purposes.

Mistakes in voucher entry can happen. An incorrect amount, an incorrect ledger , or missing narration should be corrected carefully.

If the books are still open and not finalised, the voucher can be altered directly in BUSY.

If the books are already finalised, the original voucher should not be deleted. Instead, a reversal entry should be passed and then the correct entry should be recorded.

Original Wrong Entry

(Wrong entry: Rs. 5,000 entered instead of Rs. 500)

Reversal Entry

(Reversing incorrect entry, Ref. PV/2025-26/0231)

Correct Entry

(Correct entry for stationery purchased for Rs. 500)

GST on Gift Vouchers (2024-25 Update)

Many businesses want to know whether GST applies to gift vouchers. The current position was clarified by CBIC Circular No. 243/37/2024-GST dated 31 December 2024.

According to the circular, gift vouchers and gift cards are not subject to GST at the time of issue. They are treated as payment instruments, not as goods or services, at that stage.

GST applies when the voucher is redeemed for the underlying goods or services. If a distributor works on commission, GST may apply to the commission earned.

GST Treatment Summary

(Correct entry for stationery purchased for Rs. 500)

Accounting Entry When a Gift Voucher Is Issued

(Being a Diwali gift voucher of Rs. 500 issued, no GST at this stage)

When the Gift Voucher Is Redeemed

(Being a Diwali gift voucher of Rs. 500 issued, no GST at this stage)

Conclusion

The main types of accounting vouchers cover the key transactions a business handles every day. These include money received, money paid, purchases, sales, internal transfers, adjustments, returns, petty cash expenses, and stock movement. Each voucher type has a specific role and helps keep the books accurate and balanced.

For Indian businesses, BUSY accounting software supports all 10 voucher types within a single system. It helps with GST-ready entries, automatic voucher numbering, e-invoice support , and easy printing, making records more organised and easier to review.