Question

Identify and discuss the common systems for approving vendor payments.

Answer 1

Systems for approving vendor payments:

The vendor payments are categorized under two systems, the first system is the Voucher system and second is the Non-Voucher system.

Voucher system: Through the voucher a company controls over the payment released to the department to its vendors and service providers. A voucher is usually issued for generating the invoice for the payment made from the company purchase in order to tally the credentials as per the receiving report.

Non-Voucher system: It basically works like an open invoice system, the invoice that is accepted are stored on vendor records in an open invoice file system. Instruments like cheques are issued in favor of each invoice and its status of paid/ non-paid are stored in the invoice file by validating the document accurately.