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TASBooks - Contra entry on Standard VAT

Created on  | Last modified on 


If you both buy from and sell to a company, you can offset what the company owes you against what you owe the with a contra journal.


The entry credits the Customers Sales Ledger account and debits the same company's Purchase Ledger account for the same amount.


Before you begin
  • Set up the relevant company with a customer record, making sure you choose Yes in the Also a Supplier option.
  • Set up the relevant company with a supplier record. When you're setting up the supplier record, make sure you choose Yes in the Also a Customer option.
  • Enter the relevant customer and supplier invoices in the normal manner.
  • Take a backup of your company data.
Enter a contra entry in the Sales ledger or Purchase ledger
  1. Click Sales, then click Enter / Change Journals, then click Enter / Change Customer Credit Notes / Credit Journals.
  2. Complete the following information:

    Posting No Ignore this option.
    Date Enter the date you want to post the contra entry for.
    Type Choose Contra with PL or Contra with SL, as applicable.
  3. Click Code, then select the relevant customer from the lookup list
  4. Complete the following information:

    Ref No Enter a reference for this transaction.
    Date Enter the required date.
    Desc Edit the description if required.
    Net Enter the amount of this transaction.
    VAT Ignore this option.
    Total The total amount calculates automatically here.
  5. Click Save then click Yes.

Once you enter the contra journal, an unallocated payment automatically posts to the customer and supplier accounts simultaneously. The type is X for contraentry and will be in red on the relevant account enquiries.You will then need to allocate this payment to the outstanding invoices on both ledgers.

Allocate payments to outstanding invoices
  1. Click Sales, then click Receipts, then click Enter / Allocate Sales Ledger Receipts.
  2. In the Bank drop-down, choose None (Existing Receipt) or None (Existing Payment).
  3. Click Code, then enter the appropriate customer code.
  4. Press the Tab button on your keyboard.
  5. Double-click the payment you want to allocate.
  6. Select the appropriate option from the Allocate Credit window.
  7. Double-click the invoices you want to pay.
  8. Click Save, then click Yes.
  9. Click Cancel.


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