What are Vouchers?
Vouchers are documents that record transactions such as sales, purchases, payments, receipts of money, etc. They act as evidence of a business transaction and are used for accounting and auditing purposes.
What are Voucher Books?
Voucher Books is just a way to organize similar vouchers in different groups. For example, the "Invoice Voucher Book" consists of all the invoice vouchers. Journal Voucher Book consists of all the journal vouchers, and so on.
Types of Vouchers
Theoretically, vouchers can be grouped into two types: 1) Cash vouchers and 2) Non-cash or transfer vouchers.
Cash vouchers refer to transactions involving cash and can be divided into Credit Vouchers (for incoming cash) and Debit Vouchers (for outgoing cash).
Non-cash vouchers pertain to transactions that do not involve cash, such as recording depreciation of assets.
Now, let's understand the most used voucher types in detail:
1. Contra Vouchers
These are generated under three circumstances:
Withdrawal of cash from a personal bank account.
Deposit of cash into a personal bank account.
Transfer of money between personal bank accounts.
The thumb rule: Contra vouchers are exclusively used for cash-to-bank, bank-to-cash, and bank-to-bank transactions.
2. Payment Vouchers
These are issued whenever a payment is made, either in cash or through the bank (via check or online transfer).
3. Receipt Vouchers
These are created whenever money is received, either in cash or deposited into a bank account (via check or online transfer).
4. Sales Vouchers
These are issued when a company sells goods or services to a customer.
5. Purchase Vouchers
These are confirmations of the acquisition of goods or services. In GST, both expenses & fixed assets transactions come under inward supplies or purchase vouchers.
6. Journal Vouchers
These are used to record non-cash transactions, like recording depreciation on assets.
7. Debit and Credit Vouchers
These vouchers confirm debit or credit transactions. A debit voucher might be issued when a company returns goods to a supplier, and a credit voucher might be issued when a customer returns goods.
Can a Single Transaction Appear in Multiple Vouchers?
Short answer - No.
Typically, a single transaction is represented by one voucher type to prevent redundancy and confusion. For instance, a sales voucher is created for a sale, and a receipt voucher is issued when payment is received.
Nonetheless, a single financial event can involve multiple vouchers if it comprises multiple components. For example, purchasing goods on credit would first result in a purchase voucher when goods are received, followed by a payment voucher when the payment is subsequently made.
Similarly, supporting vouchers like invoices or receipts often accompany other voucher types to provide supplementary proof or transaction details. While the same transaction might appear across multiple vouchers in these instances, each voucher caters to a different transaction aspect or stage.
Additional Resources:
1. Introduction to advanced accounting on Refrens
2. What are account groups, categories, and types?
3. How to create, edit, and download account groups?
Read the help article here>
4. How to create accounts (i.e. ledgers) and track ledger entries?
Read the help article here>
5. How to create new voucher books and add voucher entries?