A voucher is an essential document utilized by a company’s accounts payable department to collect and organize all the necessary supporting documents for approving the payment of a liability. Additionally, governments also issue vouchers redeemable for various programs such as school choice, housing, and social welfare initiatives.
A voucher can also refer to a document, such as a coupon or ticket, that can be exchanged for a good or service, particularly common in the hospitality industry. For example, airlines, hotels, and restaurants may issue vouchers that can be redeemed for rooms, flights, or meals.
Key Takeaways
- A voucher is a document used by a company’s accounts payable department containing the supporting documents for an invoice.
- Vouchers serve as the backup documents for accounts payable, indicating bills owed by companies to vendors and suppliers.
- Documents in a voucher can include the supplier’s invoice, amount owed, due date, general ledger accounts, and shipping receipts.
- All of the amounts of outstanding vouchers are summarized and recorded as accounts payable on the balance sheet.
- Vouchers are also used by governments and private businesses and can be redeemed for various goods or services.
The Essence of Vouchers
A voucher primarily serves as the supporting document for accounts payable, representing short-term debts owed by companies to vendors and suppliers. It is critical for internal accounting control to ensure payments are properly authorized and goods or services received.
Companies encounter various short-term financial obligations to suppliers during an accounting period. They might buy inventory or raw materials on credit from suppliers, allowing for future payments typically over 30, 60, or 90 days. A voucher compiles all necessary supporting documents showing the money owed to vendors, serving as a form of internal control.
Requirements of a Voucher
Essential supporting documents in a voucher include:
- Invoice from the supplier
- Name of the vendor or supplier
- Payment terms such as amount owed, due date, and any early payment discounts
- The company’s purchase order
- Receipt showing that goods were received by the company from the supplier
- General ledger accounts for accounting purposes
- Authorized signatures from company representatives for the purchase and payment
- Proof of payment and date once the invoice has been settled
Vouchers often contain expiration dates along with various terms, conditions, and restrictions, important to understand for successful redemption.
Special Considerations
The total amount of all vouchers with outstanding balances is recorded as accounts payable on the balance sheet. When paid, the proof of payment is included in the voucher, marking it as paid.
Vouchers serve as a key evidence source during audits. An auditor reviews these to confirm that goods purchased were received, supporting the auditor’s assertion of accurate financial statements. They also justify the firm’s cash payments to vendors and document the general ledger accounts used.
Using a voucher system mitigates the risk of employee collusion to steal company assets by implementing segregation of duties, assigning critical tasks to diverse personnel to ensure transparency.
Real-World Example of a Voucher
Imagine a local restaurant regularly orders meat and fish from its vendors. The restaurant manager fills out a purchase order for 30 pounds of meat, which the owner then approves by initialing. Upon receipt, the shipment is checked against the purchase order to ensure completeness. The restaurant then completes a shipping receipt, comparing it with the vendor’s invoice.
The voucher, a cover page explaining the attached documents, includes the purchase order, shipping receipt, and the invoice. The payable amount is recorded in accounts payable on the balance sheet. The owner verifies all information first before signing a check.
The voucher also includes general ledger accounts for transaction recording. For instance, the restaurant might debit the meat inventory account and credit the cash account for payment. The voucher likewise records payment receipt and date, showing the voucher as settled, reducing the accounts payable balance.
The Importance of Vouchers
Vouchers are pivotal as they act as an internal accounting control mechanism ensuring proper payment authorization and receipt confirmation of goods/services.
Benefits of Vouchers
During an audit, vouchers are indispensable as they validate existence the items in the financial statements and corroborate firm’s cash payments to vendors. They also function as a tool to minimize employee theft risk, affirming the execution of critical functions by separate personnel.
Key Components in a Voucher
Typically, a voucher includes all necessary supporting documents indicating the owed money and payments. Common documents are supplier invoice, supplier name, terms for payment (amount, due date, early payment discounts), company’s purchase order, receipt of goods, general ledger accounts, signatures of authorized representatives, and payment proof with date.
Section 8 Housing Vouchers
The Federal Housing Choice Voucher Program, or Section 8 Housing, helps low-income or disabled families secure affordable private housing. Families can use these vouchers for various home types, unrestricted to subsidized housing projects or units.
School Vouchers
A school voucher allows eligible families to choose private or charter schools using a portion of state funding originally allocated to public schools.
