A voucher system of control is used in accounting to ensure that payments made by a business are properly approved and are documented and supported by the correct accounting source documents.
The Voucher System of Control
A voucher is prepared by the accounts department based on accounting source documents available for the transaction.
Voucher System in Accounting Supporting Documentation
The supporting documentation depends on the particular type of accounting transaction. In the case of a transaction with a supplier of goods the supporting documentation will include the following.
- Purchase requisition from the department requesting the goods
- Purchase order produced by the purchasing department and sent to the supplier
- Invoice from the supplier
- Goods received note confirming the receipt of goods by the business
Information Included on the Voucher
The voucher effectively collates the supporting documentation and summarizes the transaction. The details included on the voucher include the following.
- Voucher number and date. The vouchers are usually pre-numbered
- Supplier invoice number, date, payment and discount terms, summary transaction details, and the amount to be paid.
- Payment approval signature.
- Accounting ledger codes to be debited and credited.
- Due date for payment.
- Details of the payee.
- Summary of payment to be made including any discounts due.
- Details of payment method used e.g cash, check, etc.
The business now has a voucher supported by verified documentation for each transaction.
Details of each voucher are entered in numerical order into the voucher register. The voucher register is a special journal which in this system takes the place of the purchases journal. It is a book of original or prime entry.
The vouchers themselves together with the supporting documentation are filed in an unpaid voucher folder in numerical order awaiting the payment due date for the transaction.
Voucher Payment Process
When the voucher is due for payment it is removed from the unpaid folder and forwarded together with the supporting documents to a responsible official for final approval for payment.
When the voucher has been approved the payment, a check or alternative method of payment, is drawn up and details of the check number and date are recorded in the voucher register. At this stage the voucher is marked as paid and filed together with the supporting documents in the voucher paid folder. It is noted that the total of the vouchers in the unpaid folder represent the outstanding liability to suppliers which should agree to the balance on the accounts payable account. The final step of the process is to send the payment to the supplier.
The voucher system in accounting collates supporting documentation for a transaction and ensures that payment can only be made if the transaction has the required documentation and is approved by a responsible official.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.