What a Payment Voucher Does

Three jobs at once:

• It authorises. The signature block is the point at which someone with the authority to spend the money says yes. Until then it’s a request.
• It records. The account head tells the bookkeeper where the entry posts, so the payment lands in the right place in the ledger rather than being classified by someone guessing weeks later.
• It evidences. With the supporting invoice attached, the voucher is what an auditor, a tax authority or your own accountant looks at to confirm the payment was genuine, approved, and correctly categorised.

That last point is why vouchers survive in the age of online banking. A bank statement proves money left the account; it doesn’t prove anyone authorised it, what it was for, or which cost centre should carry it.

The Three-Way Match

The fundamental control in accounts payable, and the reason a payment voucher exists at all. Before a supplier payment is approved, three documents must agree:

• The purchase order — what you agreed to buy, and at what price.
• The goods received note or delivery record — what actually arrived, and in what condition.
• The supplier invoice — what you’re being asked to pay.

If the invoice says 12 chairs and the delivery note says 10, the payment stops at 10 until someone explains the difference. If the invoice price is higher than the purchase order, it stops until someone approves the variance. Quantity, price and description all have to reconcile.

It sounds bureaucratic until you consider what it prevents: paying twice for the same invoice, paying for goods that never arrived, paying a price nobody agreed, and paying an invoice from a supplier you don’t actually use. Those four account for most of the money small businesses lose to payables errors and fraud, and a two-minute check catches all of them.

On the voucher, reference all three: the PO number, the delivery note number, and the invoice number. That single line is what makes the match auditable afterwards, and it’s the field most home-made vouchers leave off.

Types of Payment Voucher

• Cash payment voucher — for payments made in physical cash. Records the payee, the account head and the amount, and should always carry the recipient’s signature confirming they received the money. These need the tightest control, because cash leaves no independent trail.
• Bank payment voucher — for payments by cheque, transfer or standing order. Add the cheque number or transaction reference, which is what links your voucher to the line on the bank statement and makes reconciliation possible.
• Journal voucher — for entries that adjust the books without money moving: corrections, accruals, depreciation, transfers between accounts. Because there’s no bank or cash movement to verify against, journal vouchers carry more risk than either of the above and should be approved at a higher level.
• Advance or prepayment voucher — for money paid before goods or services are received: a deposit, a supplier advance, travel money issued to staff. Two things matter here — record what the advance is for, and record how and when it will be settled. Unsettled advances are one of the commonest items sitting unexplained on a small company’s balance sheet at year end.

What Goes on a Payment Voucher

• Organization name, and branch or department where relevant.
• Voucher type and number, from a sequence of its own.
• Date.
• Payee — the full name of the supplier or person being paid.
• Supporting document references — invoice number, purchase order number, delivery note number.
• Description — what the payment is for, specifically enough that someone reading it in a year understands it.
• Account head and code for each line.
• Gross amount, any deductions (withholding tax, retention, advance recovery), and the net amount paid.
• Amount in words, as a safeguard against alteration after approval.
• Payment method and reference — cheque number, transfer reference, or “cash”.
• Four signatures — prepared, checked, approved, received.

Bank Payment Voucher Example

Three features do the work. The supporting documents line names all three — invoice, purchase order and goods received note — so the match is verifiable months later. The gross, deduction and net are shown separately, which is what the supplier’s account and the tax return both need. And the transfer reference is on the voucher, so reconciling it against the bank statement takes seconds.

Free Payment Voucher Templates in MS Word

Each template below is editable in Word. Set your account codes and approval limits once, then print a batch — vouchers are completed by hand far more often than on screen.

Bank Payment Voucher

For cheque and transfer payments — payee, supporting document references, account heads, deductions, and the payment reference for reconciliation.

Cash Payment Voucher

For payments made in physical cash, with a prominent recipient signature line confirming the money was received.

Advance Payment Voucher

For deposits, supplier advances and travel money — with fields for what the advance covers and how it will be settled.

Professional payment voucher design

Grab this Payment Voucher Template by clicking on the below download button.

Cash payment voucher template

Grab this Payment Voucher Template by clicking on the below download button.

Salary payment voucher format

Grab this Payment Voucher Template by clicking on the below download button.

Business payment voucher sample

Advance payment voucher format

Withholding Tax and Deductions

In many countries a business paying certain suppliers must deduct tax at source, pay the supplier the net figure, and remit the deduction to the tax authority. The voucher is where that calculation is recorded, and getting the presentation right matters for three different reasons.

Always show gross, deduction and net as separate lines. The supplier’s ledger account is credited with the gross; the tax authority is owed the deduction; the bank account is reduced by the net. A voucher showing only the net figure makes all three of those harder to reconcile, and it’s the commonest error on hand-prepared vouchers.

Other deductions handled the same way: retention held back on construction contracts, recovery of an earlier advance, and any agreed credit note offset against the invoice. Each gets its own line with a reference, never a silently reduced total.

Issue the supplier a deduction certificate where your jurisdiction requires it — they’ll need it to claim the credit, and requests for missing certificates months later are tedious for everyone. Rates, thresholds and which payments are caught vary considerably by country and change regularly, so check the current rules rather than relying on what was true last year.

Authorisation and Segregation of Duties

The four signature lines aren’t formality. Each represents a different person doing a different job, and separating them is the control:

• Prepared by — whoever raised the voucher and coded it.
• Checked by — someone verifying the arithmetic, the coding, and that the supporting documents match.
• Approved by — the person with authority to release the money, within a stated limit.
• Received by — signed by the payee where cash is involved. This is the line most often left blank and the one that proves the money reached its destination.

Two rules hold even in a very small business: the person who prepares a voucher should never be the person who approves it, and whoever receives cash should always sign for it. Set approval limits in writing — a figure above which a second signature is required, and a higher one requiring a director — rather than leaving it to judgement in the moment.

For payments requiring a cheque to be drawn, our check requisition templates cover the request stage that precedes the voucher.

Numbering, Filing and Retention

• Separate sequences per voucher type — BPV for bank, CPV for cash, JV for journal — each running continuously.
• Never skip or reuse a number. A gap in the sequence is the first thing an auditor asks about.
• Staple the supporting documents to the voucher — invoice, purchase order, delivery note. A voucher filed without them is an unsupported entry.
• Cancel spoiled vouchers rather than discarding them: mark them cancelled, keep them in sequence, file them.
• Never alter an approved voucher. Cancel it and raise a new one with a new number.
• File by number, by month, with each period kept together.
• Retain them as long as your other accounting records — vouchers are the primary evidence behind every payment, and they’re what a tax authority will ask to see.

Payment Voucher, Cash Voucher, or Receipt?

• A payment voucher authorises and records a payment out, by any method. This page.
• A cash voucher is the source document behind a cash book entry, in either direction, carrying the account head.
• A petty cash voucher is the slip raised against a small-expense float.
• A cash receipt is what you give the person who paid you.

Looking for promotional coupons rather than accounting documents? Our discount voucher templates and gift voucher templates cover those.

Frequently Asked Questions

What is a payment voucher?

An internal document that authorises a payment and records it for the accounts — showing the payee, the amount, what it’s for, which account it posts to, and who approved it, with the supporting invoice attached.

What is the three-way match?

Checking that the purchase order, the goods received note and the supplier invoice agree on quantity, price and description before a payment is approved. It prevents paying twice, paying for goods never received, and paying prices nobody agreed.

What are the types of payment voucher?

Cash payment vouchers for physical cash, bank payment vouchers for cheques and transfers, journal vouchers for adjustments where no money moves, and advance vouchers for deposits and prepayments.

What should a payment voucher include?

Voucher number and date, payee, invoice and purchase order references, a description, account heads and codes, gross amount, deductions, net paid, the amount in words, the payment method and reference, and four signatures.

How is withholding tax shown on a voucher?

As three separate lines — gross amount, the deduction, and net paid. The supplier’s account is credited with the gross, the tax authority is owed the deduction, and the bank is reduced by the net, so a voucher showing only the net makes all three harder to reconcile.

Who should sign a payment voucher?

Four people: whoever prepared it, whoever checked it, whoever approved the payment within their authority limit, and the recipient where cash is involved. At minimum, the preparer and the approver should be different people.

What is the difference between a payment voucher and an invoice?

The invoice comes from the supplier asking to be paid. The payment voucher is your own internal document authorising and recording that payment, with the invoice attached to it as supporting evidence.

How long should payment vouchers be kept?

As long as your other accounting records — they’re the primary evidence behind every payment, and auditors and tax authorities will ask for them. File them in number order by month with the supporting documents attached.

Pete Smith

Pete Smith is a Business Management graduate and a passionate advocate for practical, accessible resources that empower professionals and entrepreneurs to succeed. With a strong foundation in organizational strategy and operational efficiency, Pete combines academic knowledge with real-world insights to simplify complex business processes. He is the creator behind a growing online platform dedicated to offering free, high-quality documents, templates, and actionable tips designed to save time and improve productivity.

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