What Is the Meaning Of Credit Voucher & Its Importance

What Is the Meaning Of Credit Voucher & Its Importance

5-6 minutes

Credit Voucher Definition

Basically, a credit voucher refers to a document that is used to record accounting transactions. This includes monetary value such as cash payments if a payment is done.

Voucher is not an alien document. However, do you know there are different types of vouchers that you must be aware of? The credit voucher is one of them.

Let''s dip into it and learn everything in relation to vouchers, more so credit vouchers.

In accounting, a voucher is a useful document that can work as evidence for financial transactions.

Vouchers tell what things were bought, or services used, from whom the service was taken, and whether or not payment was authorized.

It is just keeping score in a special kind of book called a ledger, recording all of a company.

A voucher indicates things are being done right in a business. In simpler words, it is an effective tool a company falls back on to check the proper harnessed money.

Types of Vouchers

Debit / Payment Voucher

A Debit or Payment Voucher is similar to an official receipt every time a company spends money. It records what was bought, how much was paid, who they had bought it from, and why. That''s how businesses keep track of expenses—just like a permission slip for spending. It helps organizations in cash flow management.

Credit / Receipt Voucher

A Credit or Receipt Voucher is similar to a receipt when money comes into a company. It records every small detail of the transaction. This voucher is important for acknowledgement of income as well as keeping a record of funds coming in. It is like a thank-you note for the money received.

Supporting Voucher

A Supporting Voucher is an extra voucher used to support a detail in another voucher. It could be an invoice, a bill, or any evidence of details shown on the main voucher. This voucher ensures that each and every transaction is included and provides substantial evidence and clarity of the transaction.

Non-cash Voucher

A Non-cash Voucher is one that is applied when the transaction doesn''t include any money transaction and contains adjustment & exchange. It is a process by which records are maintained for those transactions that affect no account in the business other than that of physically spending money. It helps to note correctly different activities of non-monetary transactions on the financial documents.

What is a Credit Voucher?

A Credit Voucher, also known as a receipt voucher, is a legal voucher that facilitates the written correspondence of any cash transaction. It is one of the vital entities in accounting, especially in situations involving the payment of money. It represents the tangible proof of cash or check receipt. Lastly, it summarizes the cash value of any given transaction, giving a final authoritative path regarding the receipt of funds.

Types of Credit Vouchers

Bank Credit/Receipt Voucher

Cash credit vouchers are those which show the cash that went directly to the bank from the party. This ensures that a bank will properly credit what was delivered in physical currency to the correct bank account. A bank credit voucher is only a summarized version of the cash transaction moving into the bank.

Cash Credit/Receipt Voucher

Cash Credit or Receipt Voucher is used for all kinds of payments made by a cheque or Demand Draft. This type of voucher is used only for a non-cash transaction. The amount and the mode of the payment are clearly mentioned, which helps in maintaining proper books of accounts for all the transactions in cash or non-cash.

Information Present in Credit Voucher

• Header Information
• Payer''s Information
• Mode of Payment
• Details of Transaction
• Bank Accounts
• Signature by an Authorized Person
• Remarks/Notes

Why Vouchers are Important to Organizations?

To companies, vouchers form a critical component of the financial reporting function for the rampant information contained in the receipts for documentation on the companies'' expenditure and financial status.

In a nutshell, they guarantee the certainty and objectivity of the company''s financial statements, especially in dealing with accrual accounting, which involves not changing books on a cash basis.

Organizational records can be manipulated for many purposes, such as legal suits and fraud, among others, thus the vouchers being the only concrete proof of the company''s transactions.

These documents validate the company''s expenses thus helping in preventing check or payment duplication.

There you go!

Hope you now have a clear view of vouchers as well as credit vouchers.

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