You're having problems with this mainly because you are working with one row at a time. Your control table is updated once for each row inserted, instead of updating it once with the whole range of numbers required. We've been here before - you're very new to SQL so let's try and work this through. I think that converting this stored procedure to a set-based equivalent would be best achieved in two steps, with the first being a cleanup and re-arrangement of the code, like this:

ALTER Procedure [dbo].[BS_Voucher_CreateVoucher]

@vouchertypeID int = 1,

@denomination int = 100,

@quantity int = 10,

@amountvalue int = 100,

@userid varchar(50) = 1,

@validateDays int = 40

AS

--BEGIN

SET NOCOUNT ON;

DECLARE

@vouchertype varchar(20),

@transactionID varchar(20),

@count int =1,

@max-2 int,

@vouchertypenew varchar(20),

@retval varchar(20),

@voucherstatus int

SELECT @vouchertype = VoucherType FROM GV_VoucherType WHERE VoucherTypeID = @vouchertypeID

IF @vouchertype IS NULL

RETURN -1

SELECT @voucherstatus = VoucherStatusId FROM GV_VoucherStatus WHERE VoucherStatus = 'New'

SELECT @transactionID = ISNULL(vouchervalue,0) FROM gv_vouchervalue WHERE voucherabbreviation = 'TRNID'

SELECT @max-2 = ISNULL(vouchervalue,0) FROM gv_vouchervalue WHERE voucherabbreviation = 'V'+@retval

SET @vouchertypenew = RTRIM(LTRIM(@vouchertype));

SET @retval = LEFT(@vouchertypenew,1);

WHILE CHARINDEX(' ',@vouchertypenew,1)>0

BEGIN

SET @vouchertypenew = LTRIM(RIGHT(@vouchertype,LEN(@vouchertype) - CHARINDEX(' ',@vouchertype,1)));

SET @retval += LEFT(@vouchertypenew,1);

END

WHILE @count <= @quantity

BEGIN

--If EXISTS (SELECT VoucherType FROM GV_VoucherType WHERE VoucherType = @vouchertype)

--BEGIN

INSERT INTO GV_Voucher

VALUES

(

@vouchertypeID,

'V'+@retval + Replace( Str( @max-2 + @count, 7), ' ', '0') ,

@denomination,

DATEADD(MM,6,GETDATE()),

GETDATE(),

GETDATE(),

@voucherstatus,

'TRN' + Replace( Str( @transactionID + 1, 7), ' ', '0'),

@quantity,

CASE @vouchertypenew

WHEN 'Discount' THEN @amountvalue

ELSE 0

END,

@userid,

@userid,

@validateDays,

0

)

SET @count = @count + 1

--END

END

UPDATE gv_vouchervalue

SET vouchervalue = @max-2 + @count

WHERE voucherabbreviation = 'V'+@retval

UPDATE gv_vouchervalue

SET VoucherValue = @transactionID + 1

WHERE VoucherAbbreviation = 'TRNID'

--END

RETURN 0

Test it. If there are errors, list them in detail. When it's working, it's quite straightforward to perform step 2.