What Is a Voucher in Accounting and What Is Its Purpose?

An accounting voucher serves as a fundamental internal document within a business, providing a verifiable record of financial transactions. It formalizes a transaction before it is officially entered into the company’s accounting system. This document acts as a preliminary authorization and detailed memorandum, supporting the accuracy and legitimacy of entries. The voucher ensures that every financial commitment or expenditure is properly documented and approved.

Types of Accounting Vouchers

Businesses utilize various types of accounting vouchers. A common type is the payment voucher, used to authorize and record outgoing cash or bank payments to external parties, such as suppliers or for operational expenses like rent or utilities. These vouchers ensure that all disbursements are justified and documented.

Another important category is the purchase voucher, which details the acquisition of goods or services, often before the actual payment is made. This voucher captures information about the items bought, the vendor, and the terms of the purchase, serving as a record of the company’s liabilities. Journal vouchers, also known as non-cash or adjustment vouchers, handle transactions that do not involve immediate cash or bank movements, such as depreciation entries, accruals, or internal transfers between accounts.

Sales vouchers document income-generating activities, particularly where sales are initially recorded via a voucher before an invoice is generated. This type captures details of products or services sold, the customer, and the amount. Receipt vouchers are used to record incoming cash or bank transactions, ensuring all funds received are properly accounted for.

Key Information on a Voucher

A comprehensive accounting voucher contains specific data points that ensure clarity, accuracy, and traceability. Each voucher includes a unique identification number, allowing for easy tracking and referencing within the accounting system. The date of the transaction and the date the voucher was created are also displayed.

Details about the vendor or payee, including their name, are recorded on the voucher. It also provides a clear description of the transaction, specifying the goods or services involved and the reason for the payment or receipt. The monetary amount(s) of the transaction, including net figures, any applicable taxes, and the total amount, are stated.

The voucher specifies the general ledger accounts that will be debited and credited, using appropriate account codes to ensure correct financial classification. It includes spaces for authorization signatures from various personnel, such as the preparer, reviewer, and final approver, confirming that the transaction has undergone the necessary internal checks. References to supporting documents, like invoice numbers or purchase order numbers, tie the voucher to its originating paperwork.

The Voucher Processing Cycle

The processing of an accounting voucher begins when a financial event occurs, such as the receipt of a vendor invoice or an expense report. These supporting documents trigger the initiation of a voucher, which acts as an internal record of the transaction. The initial information from the supporting documents is then assembled and entered onto the voucher form.

Once the voucher is prepared, it undergoes a review and verification process. This step involves cross-referencing the voucher details with the original supporting documents to confirm accuracy, ensure compliance with company policies, and identify any discrepancies. After verification, the voucher proceeds through an authorization and approval stage, where designated individuals sign off on the transaction.

This multi-level approval ensures that funds are disbursed or recorded only after appropriate review. Following approval, the voucher’s details are formally recorded into the accounting software or manual ledger, creating the official entry in the company’s financial books. The final step involves either initiating payment for payment-related vouchers or filing the completed voucher along with its supporting documentation for future reference and audit purposes.

Role of Vouchers in Financial Control

Accounting vouchers play a role in maintaining financial control within an organization. They create a documented audit trail for every financial transaction, allowing for traceability and verification of entries. This detailed record-keeping is useful during internal and external audits, providing evidence that transactions are legitimate and accurately recorded.

Vouchers enforce authorization and accountability by requiring approvals from designated personnel before a transaction can be processed. This structured approval process helps to prevent unauthorized expenditures and ensures that financial commitments align with organizational policies. The systematic nature of voucher processing also helps in minimizing data entry errors and inconsistencies, contributing to the overall accuracy of financial records.

The review and approval stages inherent in the voucher system act as a deterrent against fraudulent activities. The requirement for multiple checks and balances reduces the opportunity for misappropriation of funds, enhancing the integrity of financial operations. By ensuring that all transactions are properly documented and categorized, vouchers contribute directly to the reliability of a company’s financial statements.