Skip to content
Blog

What are Payment Vouchers: Know The Types.

Feature Image Of A Blog Titled Payment Vouchers

Business transactions happen in all kinds of manner in the running of their activities, with efficiency needed in the field of financial management if smoothness and transparency of operations are anything to go by.

 

One of the key tools deployed in managing the books is the voucher meant for payments.

 

Payment vouchers carry a lot of importance in that they ensure the act of making payment is documented and also authorized before execution.

 

Thus, this article shall cover what a payment voucher is, the types of payment vouchers, how one can prepare one, and present an example of a payment voucher.

What is a Payment Voucher?

The Payment voucher is a voucher for making any payments; a voucher is paper evidence for approving payment.

 

This, in other words, is also meant to ensure that the underlying financial transaction is valid and records of the same are maintained in the books of accounts.

 

It has been commonly applied in every business concern, in every government department, and even in nonprofit organizations.

 

Mostly, with a payment voucher, there come supporting documents to prove the transaction, such as an invoice, receipts, or even contracts.

 

The voucher itself will detail on it, from whom the money was paid and to whom, how much was paid, and what was the cause of the pay, along with the date it happened.

Read about: Top 7 Alternative Payment Methods in 2025.

How to Prepare Payment Vouchers

Although apparently a simple task, the preparation of a voucher of payment actually involves an elaborate system to ensure that the payment is well authorized and accounted for.

 

The succeeding discussion delineates how a voucher of payment is prepared.

  1. Collection of Supportive Documents:

Before making a voucher to effect payment, you will be required to first collect supportive documents such as invoices, receipts, contracts, or any other form of documentation related to the transaction at hand.

 

In the voucher, you are supposed to give information touching on these papers.

  1. Payee Details:

This usually is the first part of the payment voucher, which shows information belonging to the payee.

 

It fills out the details for the payee, which usually contains the name, address, and contact of the payee.

 

For Businesses, this will contain the name of the company together with the incorporation details.

  1. Amount to Be Paid:

This is the second most important information on the check. Write down the amount paid both in words and figures.

 

This is very important because it helps to avoid confusion or mistakes, especially when large amounts are involved.

  1. State the Purpose of Payment:

In the voucher, it shall be stated for what reason the payment shall be made.

 

For instance, the nature of the goods or services provided, contract number, or reference code, if any, with respect to such payment.

 

The purpose shall be in tandem with the supporting documents.

  1. Means of Payment:

Specify how this payment is being affected, whether by cheque, cash, or bank transfer, providing the cheque number and date, or transaction reference number in case of bank transfer.

  1. Approval Signatures:

The filled voucher, complete with all details, must be approved by the proper authority within the organization a manager, supervisor, or person with financial authority.

 

The signatories form an important part of the process to validate the payment.

  1. Payment Date and Voucher Number:

The payment voucher should carry a number for easy identification and, at the same time help in the tracking of that particular payment.

 

Give the date on which the payment is being made or processed.

  1. Recording of Payment in Financial Books:

After the payment voucher is approved, the transaction is recorded in the financial records or accounting system.

 

This is to ensure that the payment is reflected in the books of account, thus helping in the financial reporting as well.

Read about: Ultimate Guide To B2B International Payments In 2025.

Types of Payment Vouchers

There are many types of payment vouchers, and each has its purpose.

 

Following are some of the most commonly used types of payment vouchers by a business enterprise or any organization:

Cash Payment Voucher

A cash voucher is used where the mode of payment is in cash. Normally, this will be in cases of small dealings or when payments are to be made immediately.

 

It includes the amount of cash paid in, the purpose for which it is paid, and the person to whom the payment has been made.

 

Sample:

A small business can issue a cash payment voucher while paying cash to its supplier against office supplies.

 

It will contain the date, amount paid, details of the supplier, and the purpose of the transaction, for example, purchase of office supplies.

Cheque Payment Voucher

A cheque payment voucher is utilized in those instances where the mode of payment is by way of a cheque.

 

It will have details like the cheque number, the bank from which the cheque was issued, and details as to who the payee is.

 

Cheque payment vouchers ensure that all kinds of payments made via cheque are duly recorded. Example:

 

In the case of the company paying its vendor by cheque, the cheque payment voucher would present the cheque number and the date, the payee, the amount to be paid, and the reason behind making that particular payment.

Bank Payment Voucher

Bank Voucher: This kind of voucher is at the instance of the payment via an electronic bank transfer or even a wire.

 

It has information about the transactions including bank account number, reference number of the particular payment, and details regarding the recipient bank.

 

It is mainly used for big-size transactions or many payments.

 

A bank payment voucher is used to pay a contractor through the bank for services offered by a company.

 

It will contain the details of the bank, transaction reference, and purpose of the payment.

Petty Cash Payment Voucher

A petty cash voucher of payment is the petty cash that is paid out and issued from a petty cash fund.

 

Usually, petty cash is issued for small expenses such as office supplies, travel expense reimbursements, or minor repairs.

 

The voucher ensures that all kinds of petty cash payments are accountable.

 

Example: For instance, if an employee spent some petty cash to buy office supplies, then such an employee would fill out the petty cash payment voucher specifying the amount he or she paid, the reason behind such expenditure, and the date of the transaction.

Advance Payment Voucher

Advance Payment Voucher: This is utilized for the payment of an advance against the provision of goods or services to be availed in the future.

 

It provides records of advance payments made and outstanding balances due on receipts.

 

Example:

A payment voucher is issued by a company if it needs to purchase goods in bulk from the respective vendor. It states the purpose and the amount it has paid as an advance, together with stating the due balance. Sample Payment Voucher A specimen of the simple voucher can be looked into:

 

Payment Voucher No.: 00123

 

Date: 13th January 2025

 

Payee Details: Name: XYZ Supplies Ltd. Address: 123 Business St., City, Country Contact Number: +1234567890

 

Details of Payment:

 

Amount: 500.00 $

 

Mode of Payment: Cheque

 

Cheque No.: 234567

 

Name of Bank: ABC Bank

 

Particulars of Payment: Purchase of office supplies (Stationery and printer cartridges)

 

Approved By:

 

Signature: 
[Manager’s Signature]

 

Date: January 13, 2025

 

Prepared By:

 

Name: John Doe

 

Designation: Accounts Officer

 

This is just a simple look that a payment voucher would take if after its processing result was to be a cheque payment for some supplier.

Conclusion:

The bottom line is that payment vouchers are crucial in any business entity to ensure accounting for transparency and accountability.

 

It ensures that payments are well authorized, documented, and tracked within the books of accounts.

 

Quite clearly, having a very fine understanding of the types and preparation of such payment vouchers facilitates an organization’s processes of paying easily without error or discrepancy in its financial statements.

 

Each type of voucher, whether cash payment voucher, cheque payment voucher, or bank payment voucher, has a vital role it must play for the purpose of ensuring every financial transaction effectively takes place according to the policies and guidelines of a particular organization when dealing with finances.

 

Do follow us on Facebook and LinkedIn, to stay connected with us.

Related Post

Back To Top