A document used by the accounts department to include information as to a payable liability is known as a voucher. A voucher could be defined as a supporting document for an invoice informing a company's payable amount. A voucher acts as a backup document for payable bills which indicates an amount has been designated for a specific purpose. A voucher could also be a redeemable coupon against a good or service.
A voucher needs to have necessary information like the invoice, the vendor to whom payment needs to be made, supplier identification number, terms of purchase, terms of payment, and details of the transaction involved. It provides all the necessary information required to supplement an auditor's conclusion. Examples of vouchers include bills, salary sheets, wages sheets, and receipts which could act as an affirmation for a payment made by the company. The receipt of a voucher carries the implied understanding that all transactions have been made without any flaws.
Vouchers are essential evidence of transactions based on voucher entries in the cash book as well as other books of accounts. The amount payable is confirmed and verified based on voucher entries. The voucher needs to be accompanied by a description of the nature of the transaction. Vouchers are primarily prevalent in the hospitality sector. They are frequently used in hotels, restaurants, food outlets, hospitality and resorts. Vouchers could be of various types: payment, receipt, sales, purchase, supporting or transfer vouchers.
Advantages and Disadvantages of the Voucher system
One of the advantages of utilising vouchers in accounting is that there is better control over the accounts payable and the payment process. The numbering allows the auditor to keep a better track of the transactions, which makes auditing more systematic and organised. It is a convenient way of ensuring the accuracy and authenticity of transactions. Vouchers ensure that multiple transactions can be executed at the same time.
Vouchers also have disadvantages like increased administrative costs and sometimes complicated and accounting and paperwork