VOUCHER SYSTEM

One way of protecting the business assets, more particularly CASH, by monitoring the purchases of goods, services and the corresponding payments related to such purchases.

CHARACTERISTICS
When an obligation needs to be paid immediately or in the near future, a voucher has to be prepared. This must be supported by invoices, official receipts, statement of accounts, receiving reports or delivery receipts. The person authorized to approve the voucher should carefully reviews the supporting documents before he affixes his signature to the voucher. There must be positive assurance that the goods and services being paid for were rightfully ordered and received, and the amount due is correct. In a small business, the owner or the manager of the business may be authorized to approve a voucher. An approved voucher is the evidence that there exists an obligation that requires payment. A check can be issued ONLY if there is an approved voucher to back up the payment

ADVANTAGES
Greater control over cash since a responsible officers approves all disbursements, and a careful review of the supporting documents is done prior to approval. Tracing the responsibility for an obligation is easier if there are written evidences. There is an added assurance that it is the rightful party who received the amount of the payment since the name of the payee can be written on the face of the check. There is no need to maintain an Account Payable Subsidiary Ledger under the voucher system. The file of the unpaid vouchers will automatically give details of the outstanding obligations at any one time.

TYPES OF VOUCHER
1. Cash Voucher 2. Petty Cash Voucher 3. Check Voucher

USE OF VOUCHER REGISTER

Takes the place of the Purchases Journal. In Voucher Register, all transactions that will require payment are taken up and recorded like the purchase of merchandise, services, or fixed assets, or settlement of obligations. While only purchases of merchandise are taken up in the Purchases Journal. The Voucher Register has a credit to Vouchers Payable account, which is used for any acquisition or obligation that will need to be paid by issuance of a check. While in Purchases Journal, the credit is to Accounts Payable, which is generally used in connection with obligations arising from the normal trade transactions.

ACCOUNTING ENTRIES
In the Voucher Register: Merchandise Inventory or Purchases Vouchers Payable (No.1200) xxxx xxxx

Utilities Expenses Vouchers Payable (No.1201)

xxxx xxxx

In the Check Register: Vouchers Payable (No. 1200) Cash in Bank Vouchers Payable (No.1201) Cash in Bank xxxx xxxx xxxx xxxx