What is a 'Voucher'

A voucher is a document used by a company’s accounts payable department to gather and file all of the supporting documents needed to approve the payment of a liability. The voucher is an internal accounting control, which ensures that every payment is properly authorized and that the goods or services purchased are actually received.

BREAKING DOWN 'Voucher'

Every business maintains written procedures for each of the company’s routine accounting tasks. One task is the process of approving and paying vendor invoices and copies of certain documents must support each payment.

Examples of Vouchers

Assume that a restaurant orders meat and fish every few days from vendors. The restaurant manager fills out a purchase order for 30 pounds of meat and the owner initials the purchase order to approve the shipment. When the shipment is received, the contents of the shipment are compared with the purchase order to ensure that the shipment matches what was ordered. The restaurant completes a shipping receipt to document the process and the shipping receipt is compared with the vendor’s invoice.

The voucher includes a cover page that explains each attachment and the purchase order, shipping receipt and the invoice are attached to the voucher. The owner reviews all of the voucher information before signing a check and the voucher may also list the general ledger accounts used to record the transaction. The restaurant, for example, can credit (increase) the meat inventory account and debit (decrease) the cash account to record the payment.

How Vouchers Support an Audit

The company’s vouchers serve as a key source of evidence when an audit is performed. An auditor performs a set of procedures to determine if the financial statements are free of material misstatement. A voucher documents that the goods purchased were actually received, which supports the auditor’s assertion that the goods and services posted to the financial statements truly exist. The voucher also justifies the firm’s cash payments to vendors and documents the general ledger accounts used to post the transaction.

Factoring in Fraud Prevention

Using a voucher system also reduces the risk of employees colluding to steal company assets. Businesses use the concept of segregation of duties to prevent employee theft, which means that critical tasks are assigned to different people within the organization. Using the restaurant example, the manager fills out the purchase order, the owner approves the order and a third party compares the items received to the vendor invoice. The voucher documents that the tasks are performed by three different people and creates a paper trail so that an auditor can confirm that the duties are properly segregated.

RELATED TERMS
  1. Voucher Check

    A two-part combination of a check and voucher. Also known as ...
  2. Housing Choice Voucher Program

    The Housing Choice Voucher Program helps families with very low ...
  3. Bill Of Lading

    A legal document between the shipper of a particular good and ...
  4. Debit Note

    A document used by a purchaser to inform a vendor of the quantity ...
  5. Accounting Records

    All of the documentation and books involved in the preparation ...
  6. U.S. Department of Housing and ...

    A U.S. government agency created in 1965 to support community ...
Related Articles
  1. Investing

    State-Run Economies: From Public To Private

    Find out how former Iron Curtain countries used private enterprise to join the world financial markets.
  2. Investing

    Leasing to Section 8 Tenants?

    Real estate investors and landlords: It's worthwhile to investigate the section 8 market. Learn about the pros and cons of leasing to section 8 tenants.
  3. Investing

    Accounts Payable

    Accounts payable is the amount of a company's total invoices currently waiting to be paid. These invoices are from vendors for products and services that were recently delivered.
  4. Personal Finance

    Financial Auditor: Job Description & Average Salary

    Discover what it means to hold a financial auditor position, including typical job duties, education and training, required skills and expected salary.
  5. Investing

    What's an Invoice?

    An invoice is a document that itemizes a transaction between a buyer and a seller. Invoices can also be called bills or statements.
  6. Financial Advisor

    Examining A Career As An Auditor

    Stricter government regulations have put auditing professionals in demand.
  7. Taxes

    What Does an Auditor Do?

    An auditor ensures that organizations maintain accurate and honest financial records.
  8. Personal Finance

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  9. Personal Finance

    Career Advice: Accounting Vs. Auditing

    Understand the subtle distinctions between accounting and auditing, and learn what each offers a new graduate in terms of salary, job security and daily life.
  10. Investing

    Creating An Invoice Template

    How to ensure your invoices include all the key information - in a design that makes them easy to find. A little effort now saves a lot of trouble later.
RELATED FAQS
  1. When should I send my master Bill of Lading?

    A master bill of lading firms up the shipment details between the shipper of goods and the transportation provider or the ... Read Answer >>
  2. What are the GAAP standards for digital document storage?

    According to Sarbanes Oxley Act (SOX), companies are required to keep all documents that contain information about a company's ... Read Answer >>
  3. Are accounts payable an asset?

    Find out why the general ledger accounts payable is considered to be a current liability, not a current asset, and how it ... Read Answer >>
  4. When would a vendor care about its accounts payable turnover ratio?

    Read about some of the reasons that vendors should pay attention to their accounts payable turnover ratio, and how it helps ... Read Answer >>
  5. What is the difference between accrual accounting and accounts payable?

    Understand the difference between accrual accounting, an accounting method, and accounts payable, which is a ledger entry ... Read Answer >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center