How business voucher works and how to create one

Vouchers are used for business payments to keep a record of payments made to the vendor. They serve as evidence of payment transactions entered in the books by the accounts payable department.

What is a business voucher?

A business voucher is an internal document issued by the accounts payable department of an organisation on receipt of an invoice. It serves as proof of recording a payment transaction in the books and at the same time helps to maintain effective control over the payables process.

How does a business voucher work?

Under normal business circumstances, payments are not immediately due. A business needs to make payment as per the payment terms and maturity date set by the supplier. It usually varies from 30 to 90 days. When a business receives an invoice from the supplier, it creates a voucher to set reminders for payments due on different dates. The voucher is stamped as paid when the payment is made, and the accounting entry for payment is passed. A voucher should contain the following details:

• Invoice number and date by the supplier
• Details of the supplier such as its name, address and contact information
• Amount due and due date of payment
• Purchase order details 
• Details of goods receipt 
• Proof of payment done against the invoice
• Signature of the authorised representative of the company

Let us understand the process of creating a business voucher:

1. A company creates a purchase order stating its requirements to the supplier.
2. The supplier may accept the same or request some changes before acceptance.
3. The company will receive the delivery of goods or services as per the order placed.
4. The company will receive an invoice for such receipt of goods or services. It will then create a voucher to support the invoice.
5. Make the payment on the due date and pass an accounting entry for such payment.

Steps to create a business voucher

There are various payment voucher templates available in MS word, excel, etc. One can choose the relevant format as per the business needs. Below are the steps to create a business voucher: 

1.Select the suitable template and update the company logo on the same.

2.Update the supplier details on the same.

3.Enter the invoice details, payment details, description of goods and amount.

4.The voucher is then authorised by the respective accounts payable head.

5.It is saved for further accounting purposes.