Introduction of System
Some of the problems encountered in the operation of a voucher system will now be discussed, the first of which is the introduction of the system in a business where the old method of handling purchases is in use. The requirement here is the closing of the open accounts on the purchase ledger and their transfer to the voucher register. This may be accomplished in two ways—one of which requires a change in the controlling account, and the other of which does not. Under the first plan without formality, the accounts in the purchase ledger are balanced and closed by indicating in their explanation columns the transfer of the balance to the voucher register. As these accounts are entered on the voucher register, each of the items comprising the balance of an account should be given separate vouchers rather than entered under one voucher for the whole amount. This is particularly true where the different items are subject to different discount and credit terms, rendering it undesirable to pay them all at the same time. After entry on the voucher register, the amounts may be distributed to the Sundry column and charged to the controlling account, Accounts or Vouchers Payable, as the case may be. The register should now be totaled, i.e., the Vouchers Payable and Sundry columns should be added and the register ruled off. These totals, being to the credit and debit of the same account, may or may not be posted, as the balance of the controlling account is not affected. Under the second plan the register is left open, i.e., not totaled. In this way the credit to the Vouchers Payable account is included with the total to be posted at the end of the current month when the register is first summarized. This, of course, necessitates posting the corresponding debit of the amounts distributed to the Sundry column as explained above.
The new voucher system is now ready for use and current entries will be made as previously explained.
Purchase Returns and Allowances
The handling of purchase returns and allowances is awkward under the voucher system. If the goods can be inspected and accepted or adjustment secured when necessary, before the voucher for the transaction is made up, then the amount to be paid is always the amount of the voucher and no change need be made in the amounts entered and distributed on the register. Where this is done a Purchase Returns and Allowances Account is not required. This procedure, however, is not always possible, for a first inspection does not always show the true condition of goods. Adjustment of the general ledger accounts could be made by entry of the return or allowance through the general journal. That would not, however, leave any indication in the voucher register record of the fact that cancellation of the liability there shown was made by payment of a lesser amount than the one entered, and it is desirable that these two amounts be the same.
To accomplish this, entry of the allowance should be made, in small red ink figures on the upper part of the line just below the vouchers affected, entering in red the voucher number—the same as the voucher to which it applies—and the amount of the allowance, both in the Vouchers Payable column and the distributive columns affected by the allowance. These red ink items are, of course, deductions, the summary amounts of the various columns being net totals, i.e., the totals of regular items less the red figures; or two totals may be shown, one above the other, the regular and the red. Where both black and red totals are shown, both must be posted, the red as contras or offsets to their corresponding black postings. If desired, separate Purchase Returns and Allowances accounts may be opened.
An alternative method, requiring more work but handling the difficulty somewhat more neatly, cancels the original voucher by marking it paid and its check void, and issues in its stead a new one for the correct amount. The new voucher is handled regularly in the cash book, but in the register distribution is made to the Sundry column and charged to Vouchers Payable, as the purchase has already been charged from the original voucher. This charge to Vouchers Payable cancels the credit from the journal and allows the liability for the new amount to be shown in the total of the Vouchers Payable column of the register. The cancellation is best evidenced by entry in the general journal somewhat as follows:
| Vouchers Payable | $2,150.40 | |
| Vouchers Payable | $2,101.59 | |
| Purchase Returns and Allowances | 48.81 | |
| To cancel Vo. #2158 and authorize its reissue in Vo. #3245, account of return of defective goods. |
Under this method postings to the Vouchers Payable account, instead of being limited in their origin to voucher register and cash book, will be made also from the general journal.
Partial Payments