Validation of bills, invoices, receipts & vouchers

Invoice Validation

Essentials of a Voucher

• Project name – in order to identify that the voucher belongs to a particular project, the project name needs to be stamped / marked on the voucher.
• Voucher number – the voucher should be numbered and these voucher numbers should be pre-printed. The voucher book should be officially issued to the person responsible for preparation of vouchers. Any vouchers wrongly written should be marked `CANCELLED’ across the face of the voucher and left in the book itself. Hence, either the vouchers would have been used and taken into the cash book or be left as cancelled or accounted for as balance remaining. This is a good practice in accounting and can be introduced over a period of time.
• Date and the serial number of the voucher used.
• Classification – The cost centers and line items are clearly specified in the proposal. On the basis of the nature of expenses, it is verified that the expense is correctly classified into the various line items as appearing in the proposal.
• Narration – there should be a detailed narration in support of the classification showing the description of the transactions.
• Amount – it is verified that the amount on the voucher is equal to the amount reflected by the supporting documents, or matches any adjustments effected (e.g.: advance payments adjusted)
• Supporting documents – these are in the form of original bills, which are\ the real proof of transactions based on which payment is affected. The classification of the expense is based on the nature of expense reflected by these documents and the amount on the voucher should be the amount reflected by these documents.
• Signature of the person preparing the voucher
• Signature of the person authorizing payment (To verify with the delegation of powers of each member authorized within the organization to approve payments)
• Signature of the person receiving payment
• Defacing of vouchers and supporting documents by a 'PAID' stamp, subsequent to payment to avoid duplication of payments, and providing reference numbers of vouchers and check number if relevant.

Bank Payments

• Payment Voucher has to be prepared before preparing any check.
• Check will not be prepared, for whatever reason, if sufficient balance is not available with bank.
• All Vouchers have to be verified and approved before payment is released.
• Payment has to be made only against original bills and claims. Any type of copy of bill or claim should not be entertained.
• All supporting documents should be attached with the Payment Voucher and filed according to serial number.
• Cheque should be written legibly and doubly ensure that the amount in words and figures are the same.
• All cheque have to be crossed. A Rubber Stamp stating "A/c Payee Only"
• Post-dated cheque are not to be issued.
• All cheque are stamped "for the Name of the Organization"

Controls to be exercised

• All letters/instructions to the bank should be signed by the authorized signatories only.
• Checks in advance or in blank should never be signed.
• Un-cashed cheque should be cancelled within a reasonable period.
• Specimen signatures should not be left unsupervised.
• Cheque books should always be kept under lock and key. Only authorized persons should be allowed to handle them.
• A receipt after payment by check should be insisted.
• Bank reconciliation statement has to be done on a monthly basis.

Bank Reconciliation Statement

This has to be done every month to ensure the balances as per the bankbook and the passbook tally. Following the reconciliation it should be made sure that entries are passed (if any) for bank charges, interest received etc. in the books immediately.

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