A Voucher is an internal document used for supporting the entries in accounting books. It is treated as a redeemable transaction bond, has monetary value and is useful for specific purposes. There are different types of accounting vouchers for any business, which are as follows:
- Cash Voucher – These vouchers get prepared by a firm solely for cash transactions like receipts and payments. It can be a Debit Voucher that a firm prepares only for cash payments to suppliers or vendors to purchase raw materials and semi-finished goods for production, purchase of assets or payments of expenses. It can also be a Credit Voucher that a firm prepares only for cash receipts from customers or vendors to sell goods to the customer, sale of assets or receipt of income.
- Non-Cash Voucher – These vouchers are also known as transfer vouchers, and they get prepared for credit transactions only. Examples of such transactions are credit purchase or sale of goods, purchase or sale of fixed assets on credit, etc.
The preparation of vouchers depends on how a transaction gets recorded in the account books. Based on the complexity of a transaction, the vouchers can be classified as follows:
- Transaction Voucher – It is a voucher prepared by the firm when one account gets debited and another account gets credited for a transaction.
- Compound Voucher – It is a voucher prepared by the firm for two types of transactions. The first type is where more than one account gets debited, but only one account gets credited for a transaction. And the second type is where more than one account gets credited, but only one account gets debited for a transaction.
- Complex Voucher – It is a voucher prepared by a firm when multiple accounts are debited and credited for a transaction.
The preparation of vouchers includes various supporting documents, which are as follows:
- The invoice that the supplier receives from the firm
- The details of the supplier like name, address and contact number
- The details of the payment like the amount, discounts or the due date of payment
- The details related to the initial purchase order that the company had made with the supplier
- The receipt with details of the transaction confirming that the company had received the goods or the services as mentioned in the invoice
- The details of the ledger accounts related to the particular transaction
- The signature of the company’s authorised signatory validating the purchase of goods or services along with receipt of the payment
- The proof of the payment that is in the documentation for the voucher
The main steps involved in the preparation of vouchers are as follows:
- The company gets in touch with the supplier to place an order for raw materials or semi-finished goods. If the supplier agrees with the order’s specifications and the amount, then the firm places the order with them.
- The supplier prepares and sends the order consignment to the firm. There is a quality control check to see if there are no defective or damaged items in that consignment. The person/s responsible for quality control also check if the order matches the specifications.
- After the firm is satisfied with the order, it creates a voucher for the transaction with the relevant details and supporting documents.
- The voucher and the supporting documents get thoroughly checked by both parties to ensure zero errors. Post that, the company pays the supplier for the consignment.
The Preparation of Vouchers is an essential part of any business. It acts as evidence for a transaction between two parties and is necessary, especially during audits. It also prevents misconduct from the employees as a voucher creates a paper trail for every transaction. If there are any discrepancies, the firm can easily trace the culprit and punish them.