Difference Between Source Document and Voucher

This is a high school topic to study about source documents and vouchers. Rarely do students take note of these minor topics but it is a highlighting topic of commerce. Source Documents and Vouchers play a major role in the daily transactions of a business, hence students are advised to study these minor topics thoroughly as well. Our main discussion will be – the difference between Source Document and Voucher. Related topics will also be discussed as - What is Source Document?  Difference between bill and voucher and so forth.

Difference Between Source Document and Voucher In Brief

As said earlier, our main discussion will be based on the difference between source document and voucher. So, source documents are the particular ‘evidence’ that is present for a business to show its transactions. While vouchers are the documents that are required to pay off the liabilities of the business.

We will further discuss the difference between source documents and vouchers intimately. But, before this, let us clear our concept on these two terms – Source Document and Voucher.

What Is Source Document?

A source document is known as the original document which specifically contains every detail of a business transaction. A source document work is to capture the key information performed in a transaction, like the names of the parties involved in the transaction, amounts paid (if being paid), the date of transaction, and the substance or the main matter of the transaction. Source documents are frequently being identified with a unique number, which traces back to the aligned transactions. This is done so that they can be differentiated in the accounting system and accounting process. The documents are pre-numbered to allow the company in the process of the investigation if any documents go missing.

Getting Indexed

Once all the information in a source document is been recorded in the accounting system, the source document gets indexed for easy access and for processing the archives. The documents that are generated within the previous year are generally stored on-site, and the older documents are being stored in a lesser expensive off-site storage system.

Evidential Support

The source document provides a piece of evidence that the transaction has occurred. Source Document provides direct source information to the bookkeeper or accountant in a timely manner that is authentic, this will assist them in preparing the financial statements and accurately analyzing the business activity in the business concern.

Indeed, Is An Original Document

The source document is being referred to as the original document which contains the details of a business transaction. This will contain the most important details of the transaction like the amount which is being paid, and the parties involved in the transaction.

How Crucial To The Auditors? Examples Of Source Documents

Source documents are very crucial to the auditors, who use them as part of the evidence that confirms that the recorded transactions did actually occur. A source document is also used by the companies as legit proof while dealing with their business partners while paying them. Examples of source documents are:

• Canceled Checks

• Credit Memo

• Deposit slip

• Expense report

• Invoice

• Materials requisition form

• Purchase Order

• Time Card

• Sales receipt

Thus, for evidentiary purposes, the electronic images of the source documents are generally acceptable, though paper-based documentation will still be required in some of these cases.

Voucher

A voucher is any written documentation that supports the entries that are reported in the account books, this indicates the transaction's accounting accuracy, which can be referred to as a voucher. Take, for example, a bill, receipt, salary and wages sheet, pay-in-slip counterfoil, checkbook counterfoil, invoice, or trust deed.

Vouchers are Source Documents

Vouchers are the source documents that serve as evidence of the business transaction which is retained for being used in cases where the auditors need to verify the business transaction made.

Who Uses Vouchers?

A voucher is a document that is used by a company's accounts payable department in order to gather and file all of the supporting documents which are required to approve the payment of any liability. A voucher is necessary for the backup document for accounts that are payable.

Redeemable Form of Transaction Bond

A voucher is defined as a redeemable form of transaction bond which values a particular monetary value. Vouchers can only be used on any specific grounds or for any specific goods. Examples of the same include vouchers for lodging, transportation, and food charges.

Components of Voucher

The components of the vouchers are as follows:

• The supplier identification number.

• The amount is to be payable.

• The payment dates.

• The accounts that are payable record the liability made.

• Any other valid early payment discount terms.

• The approval signature or the stamp. 

Types of Vouchers

These are the different types of vouchers in an accounting system. These are as follows:

• Debit or the Payment voucher.

• Credit or the Receipt voucher.

• Supporting voucher.

• Non-Cash or the Transfer voucher (also known as Journal voucher).

Source Document Vs Voucher

Source Document and Vouchers in respect of their function, are quite similar. Let us check some of the points of difference that arise between the two.

Difference Between Bills and Vouchers

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Bills and vouchers both are terms that are predominantly used in any business transaction. The term voucher is also used in many other contexts which may create confusion about the same. However, these both are related to the products and the same prices.

Simply said, a bill is a statement that represents money to be paid item-wise. This is owed for the products that are being sold or for the services which are provided from the seller to the buyer. While a voucher can also be described as the written instruction that is used to confirm the goods and services for the specified amount of money.