What are Journal Vouchers? - Definition & Examples

Instructor: Mark Koscinski

Mark has a doctorate from Drew University and teaches accounting classes. He is a writer, editor and has experience in public and private accounting.

In this lesson you will learn about voucher systems and why they are used by companies. You will also learn about the documents typically used in a voucher system.

Definition

Your company seems to be leaking cash. It seems everyone is ordering new inventory, new equipment and even more supplies. Sticky notes and hi-liters are strewn all around the office. You decide to draw the line when someone ordered a big screen television for the cafeteria without your approval. An accounting consultant advised you to start a voucher system to put an end to the rampant spending. The goal of a voucher system is simply to control expenditures by making sure they are properly planned and approved. It establishes a procedure for approving, recording and paying obligations of the company.

Key Features

There are several key features of any voucher system:

  • Standard procedures are put into place for every transaction. If someone wishes to make a purchase, standard procedures must be followed.
  • Only approved personnel may initiate purchasing transactions. Department managers can't place orders with vendors directly. They must go through the purchasing department.
  • Each person is limited to the type of purchase he or she may initiate. For instance, only the operations manager may initiate purchases of inventory and only the facilities manager can initiate purchases of office furniture.
  • There is an appropriate segregation of duties. A department may originate a request, the purchasing department will source and place the order, the receiving department will record the arrival of the purchased item and the accounting department will pay the obligation.

The documentation process must flow freely across all of these departments in order to make the voucher system work. These documents are accumulated in one place, called the voucher. You can think of a voucher as being a file folder where all the documents are stored. In today's increasingly digital world the voucher can be a virtual folder with no paper documentation being generated.

The Purchase Requisition

With a voucher system in place, the purchasing process is initiated by the appropriate department management preparing a purchase requisition. The requisition lists the items to be purchased, the date it is needed and any additional pertinent specifications. This document is forwarded to the purchasing department and the accounting department. The accounting department opens a voucher for the requisition and gives the voucher a unique identifying number.

Subsequent Documentation

Meanwhile, the purchasing department checks to see the requisition was approved by the proper person and the amount of the order is within the authority of the approver. If the requisition is not properly approved, it will be send back to the department manager. After obtaining proper authorization, the purchasing department will issue a purchase order to the vendor. This document authorizes the vendor to ship the items ordered. After shipment, the vendor prepares an invoice, or bill, that is sent to the purchaser. When the merchandise is received by the purchaser, its receiving department will issue a receiving report. The 'receiver' as it is often known, will provide a count of the items received and other pertinent details such as the date the items were received and if there was any apparent damage to the merchandise.

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