What Is a Voucher Check? Understanding its Role in Financial Transactions

Category: Economics

A voucher check is a hybrid payment mechanism combining the functionalities of a traditional check and a voucher—also commonly referred to as "remittance advice." This financial instrument provides critical information pertinent to the parties involved in a transaction, thereby establishing an auditable paper trail that details the check's payment.

Key Takeaways

Understanding Voucher Checks

The primary purpose of a voucher check is to facilitate a detailed record of payments from the check's issuer. When issued, the recipient detaches one portion of the voucher for their records while the other part remains with the issuer, fostering accountability.

Historically, before the advent of computerized accounting, voucher checks were printed on standardized paper sheets with perforations. Currently, computerized systems have modernized the layout while retaining the three-part structure, which typically accommodates standard-sized printer sheets. Each check is longer than a standard check but maintains the same width, ensuring compatibility with standard invoice formats.

Components of a Voucher Check

  1. The Check: The financial document that carries the monetary value being transferred.
  2. Payee Voucher: This portion provides information for the recipient, detailing the payment specifics for their records.
  3. Issuer Voucher: This counterpart is retained by the issuing party, acting as a record of the transaction.

Role of Vouchers in Accounting

In essence, a voucher serves as a document that the accounts payable department utilizes to compile essential supporting documents necessary for authorizing and tracking payments. It acts as a backup record for various financial operations, including:

The use of vouchers stands as a cornerstone of internal accounting controls, necessary for both compliance and operational efficiency.

Who Uses Voucher Checks?

Payroll Departments

In many companies, the payroll department frequently employs voucher checks, often referred to as payroll checks. These checks typically contain:

Even as direct deposit becomes a widely adopted method for compensating employees, the practice of issuing voucher checks for record-keeping remains prevalent, ensuring a physical paper trail is available when necessary.

Vendor Transactions

Voucher checks are not limited to payroll. They also play a critical role in vendor transactions. In such cases, a voucher check is issued when an invoice is reconciled with a purchase order along with documentation confirming that the goods or services have been supplied.

For accounts payable departments, maintaining a file of these voucher records assists in resolving payment disputes and facilitates smooth internal processes during month-end financial closings, ensuring that expenditures are properly tracked and recorded.

Conclusion

In an increasingly digital financial environment, the concept of voucher checks continues to hold value for many companies. Their dual function—serving both as a means of payment and as a record-keeping tool—makes them essential for maintaining financial transparency and accountability. By understanding how voucher checks operate, organizations can better manage their payment processes, reduce errors, and ensure compliance with internal controls.