What it means
A standard cheque shows only the payee, the amount and the date. A voucher check adds a section, attached to the cheque by a perforation, that carries the detail of the payment.
The recipient tears it off and keeps it, then deposits the cheque itself. For a business paying many invoices, this detail is valuable.
A supplier receiving one cheque for several invoices can immediately see which ones are covered, what discounts were taken and whether anything was short-paid. This saves time and avoids the phone calls that would otherwise be needed to reconcile the account.
In payroll, the voucher serves as a pay stub. It typically shows gross pay, tax and other deductions, and net pay for the period.
Employees keep this stub as a record of their earnings, and it can be needed to prove income when applying for credit. The business keeps a record too.
The accounting system records the same detail, so that each cheque in the cash book can be traced back to the invoices or payroll run it settled. This supports audits, since the auditor can follow the payment from the bank statement to the underlying documents.
Voucher checks come with some control considerations. Blank cheque stock should be stored securely, issued in numerical order and signed by authorised people only.
Voided cheques should be kept and marked, so the sequence of numbers can be accounted for. Many businesses now pay by electronic transfer, which sends the same detail as a remittance advice by email.
The principle is unchanged, because the payee still needs to know what the money is for.
In practice
Real-world examples.
Example
A building supplies wholesaler pays a contractor for four invoices with one voucher check. The voucher lists each invoice number and amount, and shows a deduction for damaged materials. The contractor posts the receipt in a few minutes without any calls to the buyer.
Example
A small manufacturer prints payroll voucher checks every two weeks. Each employee's stub shows hours, gross pay, tax withheld and net pay. One worker later uses the stubs as evidence of income when applying for a car loan.
Example
An accounts payable clerk at a retailer notices a voucher check where the voucher total does not match the cheque amount. She stops the payment before it is mailed, corrects the entry and reprints it, avoiding an overpayment of $1,800.
Formula
Calculation
Cheque amount = Invoice total - Early payment discount - Credit notes and returns
A company owes a supplier an invoice of $12,000. It qualifies for a 2% early payment discount, which is $12,000 x 2% = $240. The company also holds a $500 credit for returned goods. The cheque amount = $12,000 - $240 - $500 = $11,260. The voucher section lists each of these three items, so the supplier can see exactly how the figure of $11,260 was reached.Case study
Seen in the real world.
Fairhaven Distribution is an illustrative, fictional wholesaler that paid 300 suppliers each month by plain cheque with a separate email to explain each payment. Suppliers frequently phoned to ask which invoices a cheque covered.
The accounts payable manager switched to voucher checks, with the invoice detail printed on each stub. Supplier queries dropped from about 60 calls a month to about 10, and the team estimated that this freed roughly 25 hours a month of staff time. Suppliers also reported that they could apply cash to their ledgers faster, which improved the working relationship and made it easier to negotiate better early payment terms.
Later the company moved to electronic payments, but kept the same layout for the emailed remittance advice. The illustrative lesson is that the voucher format was a useful discipline, and the clear payment detail carried over unchanged to the new method. The accounts payable manager also kept the numbered sequence of payments, so that auditors could still trace each transfer back to the invoices it settled, exactly as they had done with paper cheques.
Watch out
Common mistakes.
- Throwing away the voucher stub before reconciling the payment, which removes the evidence of what the cheque covered.
- Leaving blank voucher check stock unsecured, which creates a fraud risk.
- Printing a voucher whose detail does not agree with the cheque amount, causing confusion for the payee and the bank.
Questions
People also ask.
What is on the voucher part of the check?
It usually lists the invoice numbers, dates, amounts, discounts and deductions that make up the payment.
Do I deposit the voucher?
No, the voucher is detached and kept for records, and only the cheque portion is deposited.
Is a voucher check used for payroll?
Yes, many employers use the voucher as a pay stub showing gross pay, deductions and net pay.
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