A voucher is a supporting document for entries passed in accounting books. A voucher is prepared when an invoice is received from the supplier and payment is done. It serves as proof of the occurrence of a transaction and retains effective control over the payables process.
Importance of creating vouchers
Creating vouchers ensures that every payment is authorised and the item purchased is received. It provides an effective internal control mechanism. They are also very helpful during audits. They serve as evidence of transactions reported in the financial statements.
Types of vouchers Explained
Let us understand the types of vouchers used:
(1) Receipt voucher- It is also called a credit voucher. A receipt voucher is used to keep a record of cash or bank receipt. They are of two types:
1. Cash receipt voucher- It contains information about cash received in hand.
2. Bank receipt voucher- It contains information about cheque received, demand draft or any other mode.
Some of the instances when a receipt voucher is prepared are:
- Cash sales
- Customer advances received
- Receipt of interest, rent, etc.
- Refund of tax
Entry passed-
- Cash/bank account is debited
- Debtor account is credited
(2) Payment voucher- It is also called a debit voucher. A payment voucher is used to keep a record of payments made in cash or through the bank. They are of two types:
1. Cash payment voucher- It contains information about cash payments.
2. Bank payment voucher- It contains information about payments made by the bank.
Some of the instances when a payment voucher is prepared are:
- Payment of expenses such as rent, security, operating expenses, printing and stationery, etc.
- Payment for purchase of raw material
Entry passed-
- Creditor account is debited
- Cash/bank account is credited
(3) Journal voucher- A journal voucher is also called a non-cash voucher or transfer voucher. They serve as proof of non-cash transactions.
Example-
1. In case of credit sales, cash, or bank account is not affected, the entry below will be passed:
- Debtor account is debited
- Sale on a credit account is credited
2. Depreciating fixed assets of the company:
- The depreciation account is debited
- A fixed asset account is credited
(4) Supporting vouchers- It serves as documentary evidence of transactions that happened in the past. Example- One can attach the bill of an expense along with the primary voucher to support the same. Fuel bills are attached with conveyance vouchers.
Every company prepares such accounting vouchers as they are extremely important for a business to track down its income and expenses and ensure compliance with statutory requirements.
