Definition: A voucher is a written document that serves as proof of a transaction between a buyer and a seller. It is commonly used in finance, billing, accounting, corporate finance, business finance, bookkeeping, and invoicing, to record and track expenses, invoices, and financial transactions.
Characteristics:
- Evidence of a Transaction: A voucher acts as tangible evidence of a specific transaction that has taken place, such as the purchase or sale of goods or services. It typically includes essential details, such as the date, description, amount, and parties involved.
- Supporting Documentation: Vouchers often serve as supporting documents for invoices or other financial records. They provide additional information about the transaction, including any applicable terms, conditions, or contractual agreements.
- Recording Expenses: In the context of business finance and accounting, vouchers are commonly used to track and record expenses incurred by a company. These expenses can range from purchases of inventory or supplies to payments for services rendered.
- Internal Controls: Vouchers play a vital role in maintaining internal controls within an organization. By requiring physical documentation of transactions, they help ensure accuracy, traceability, and accountability in financial record-keeping.
Types of Vouchers:
- Payment Vouchers: These vouchers are used to authorize and record payments made by a company to its suppliers, employees, or other entities. They typically include details such as the payee’s name, payment amount, payment method, and supporting information.
- Sales Vouchers: Sales vouchers are generated by sellers to document sales transactions with customers. They provide a detailed breakdown of the products or services sold, including quantities, prices, applicable taxes, and any discounts or promotions.
- Purchase Vouchers: Purchase vouchers are created by buyers to record purchases made from suppliers or vendors. They contain information about the purchased items, quantities, prices, applicable taxes, and any discounts or rebates.
Comparison with Invoice:
While vouchers and invoices share similarities, they serve different purposes in financial transactions:
- Purpose: A voucher primarily serves as proof of a transaction, while an invoice is a document issued by a seller to a buyer, requesting payment for goods or services rendered.
- Parties Involved: Vouchers document transactions involving both buyers and sellers, while invoices are specific to the seller’s request for payment.
- Legal Obligations: An invoice creates a legally binding obligation for the buyer to make payment, whereas a voucher does not impose such a obligation.
- Timing: Vouchers are typically prepared before or at the time of a transaction, while invoices are issued after the goods or services have been provided.
Despite their differences, vouchers and invoices are often closely related, as invoices are commonly accompanied by vouchers as supporting documentation. Together, these documents provide a comprehensive record of financial transactions and ensure proper financial management and compliance.
In conclusion, a voucher is a written document that verifies and records a transaction, specifically in the fields of finance, billing, accounting, corporate finance, business finance, bookkeeping, and invoicing. It serves as tangible evidence of expenses incurred or payments made, and supports accurate financial record-keeping within an organization. While vouchers and invoices serve distinct purposes, they often work together to provide a complete and transparent picture of financial transactions.
