Contra entry in tally how to deal?

Dealing with contra entry in tally is very easy. you may use F4 or press contra from the voucher entry screen. Read more about debit and credit rules for better understanding of debit and credit accounting heads

As per the Accounting Principles, a Contra entry is a transaction involving transfer of cash between one Cash A/c to another (e.g. main cash to petty cash )or one Cash A/c to another Bank A/c i.e., is a transaction indicating transfer of funds from.

  • Cash account to Cash account
  • Cash account to Bank account
  • Bank account to Cash account
  • Bank account to Bank account

For contra transactions or for any other transactions if you don’t know which account should be debited and which account should credited then you should read basic rules of accounting entries and basics of accounting.

To view the Contra Voucher Entry Screen:

Go to Gateway of Tally > Accounting Vouchers

  1. Select F4: Contra from the Button Bar or press F4

There is 3 way to deal with contra entry voucher, you can choose whatever you think Fit. Though I prefer the 3rd mentioned method as USE PAYMENT/RECEIPT VOUCHER AS CONTRA AND single entry method.

Creating Contra Entry in Single Entry Mode

In tally.erp 9, single entry method is very easy and useful and I am using it for the last 2 years as it is fast and saves a lot of time as well as there is less chance of mistake while posting of accounting entries

The Contra Voucher can be passed using Single entry mode or Double Entry mode.  To toggle between Single Entry and Double Entry mode, we need to change the setting Use Single Entry mode for Pymt/Rcpt/Contra to Yes/No in F12 configuration.

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You should refer voucher entry configuration in tally for more understanding on the subject

To view Contra Voucher creation screen in Single Entry mode:

Go to Gateway of Tally > Accounting Vouchers > Select F4: Contra

For example, to transfer funds from Cash Account to Bank Account:

  1. Debit the Bank Account
  2. Credit the Cash Account

Why you should use single entry Mode :

  • Faster data entry.
  • When there is a Single Debit and Multiple Credits in the entry

Creating Contra Entry in Double Entry Mode

The Contra entry can be passed using Double Entry mode where we have the option to select multiple Debits and multiple Credits. To select multiple Debit and Credit ledgers in the Double entry mode, set Use Single Entry Mode for Payment/Receipt/Contra to No in F12: Configure.

Use Payment / Receipt Voucher as Contra

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The Contra Voucher is used to indicate transfer of funds from

  • Bank account to Cash account
  • Bank account to Bank account
  • Cash account to Bank account.
  • Cash account to Cash account.

When you are passing a Payment voucher, you do not get the Cash and Bank Ledgers for selection in the list of Ledger Accounts on the Debit side and when you are passing a Receipt voucher, you do not get the Cash and Bank Ledgers for selection on the credit side.This will help you to avoid posting a wrong account by mistake.

However, for users who wish to use the Payment and Receipt vouchers for this nature of transaction, Tally.ERP 9 has the flexibility of defining Payment and Receipt behavior as per Contra voucher.

Go to Gateway of Tally > Accounting Vouchers

  1. Select F5: Payment from the Button Bar or press F5.
  2. Set the option Use Payment as Contra to Yes in F12: Configuration screen.

Now, you can use payment or receipt voucher instead of contra voucher. it is more easy to use and I always pass my bank /cash transactions of contra nature through this way only

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