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What Is a Payment Voucher?

A payment voucher is a way to record payments made to suppliers and maintain a history of payments that your business has made. Companies use vouchers to gather and file supporting documents that are required to approve and track payments of liabilities. Vouchers are used by accounts payable (short-term bills owed by companies to suppliers), invoicing and payroll.

In this post, we’ll cover how to define payment voucher, what is payment voucher in accounting and look at how the payment voucher process works.

How to define “payment voucher”                         

A payment voucher is a memorandum of a company’s liabilities. It’s an important accounting tool that ensures payments are properly authorised and helps you to determine whether goods and services purchased have been actually received.

A payment voucher is especially useful in situations where payments are not due immediately. Suppliers often grant companies credit extensions so that payments can be made in the near future, e.g., 30, 60 or 90 days. When the company receives goods from a supplier along with the invoice, instead of releasing funds immediately for payment, they create a voucher to remind them of the payment due – or as a statement of payments already made.

The voucher includes all supporting documents to show how much money is owed and the payments due to a supplier or vendor for outstanding payments. Vouchers and other necessary documents are recorded in the voucher register.

What is payment voucher in accounting and what does it include?

A voucher contains the backup documents for accounts payable. It’s a supporting document for an invoice and can include:

  • Supplier invoice

  • The vendor or supplier’s details, e.g., name, address, email, etc.

  • Terms of payment, e.g., amount owed, due date, discounts, etc.

  • Purchase order (PO) with amount owed and due date

  • Shipping receipt showing goods have been received by the company

  • General ledger accounts

  • Signatures from authorised representatives of the company for purchase/payment

  • Proof of payment and date of payment of invoice

Vouchers often contain expiration dates as well as terms and conditions.

The total amount of vouchers owed is added up, with one lump sum recorded on the balance sheet as accounts payable. Once the voucher is paid, proof of payment is included in the voucher and the voucher is considered paid.

Example payment voucher process

So, how does the payment voucher process actually work? It’s pretty simple. Essentially, a company orders inventory from a vendor and the company manager fills out a purchase order. The owner initials the PO to approve the shipment. When the shipment is received, the contents of the shipped order is compared to the purchase order to ensure it matches. The company manager fills in a shipping receipt to document the process and the receipt is compared to the vendor’s invoice.

The voucher is a cover page explaining the attached documents. This includes the PO, shipping receipt and the invoice. The PO is added and recorded to accounts payable on the balance sheet until it’s paid. The owner reviews the voucher information before signing a check.

The payment voucher also contains the general ledger accounts used when recording the transaction. The company can debit the inventory account and credit the cash account to record the payment. Receipt of payment and date will be recorded to illustrate the fact the voucher is paid. The accounts payable department will record the lower balance due to the invoice having been paid.

What is a check payment voucher?

Payment vouchers can be used to record payments of cash or cheques. A voucher check – or check payment voucher – is a combination of a check and a voucher. It includes important information about each party involved in a transaction and creates an auditable paper trail about that check’s payment. A check payment voucher has three parts: the check, a voucher for the payee and a voucher for the issuer. These types of vouchers are commonly used by a company’s payroll department.

Payment vouchers offer you an invaluable way of managing your short-term payments going forward. They are there to ensure you receive the exact goods you ordered and to avoid any discrepancies creeping into your accounting system.

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