TASBooks - Contra entry on Standard VAT

If you both buy from, as well as sell to a company, you can offset what the company owes you against what you owe them. This is done with a contra journal.

You can enter a contra journal either from within the Sales Ledger or the Purchase Ledger. The entry simply credits the Customers Sales Ledger account and debits the same company's Purchase Ledger account for the same amount.

The following steps contain everything you need to help you enter a contra journal in TASBooks.

Before you begin

Before you can process a contra journal in TASBooks, you must check that you've completed the following tasks:

  • Set up the relevant company with a customer record. For more information about how to do this, please refer to article 34269.

  • Note: When you're setting up the customer record, make sure you choose Yes in the Also a Supplier option.


  • Set up the relevant company with a supplier record. For more information about how to do this, please refer to article 34278.

  • Note: 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.
  • Tip: Once you enter the contra journal, you can allocate it against the outstanding invoices.

  • Take a backup of your company data. For more information about how to do this, please refer to article 34257.

To enter a contra entry in the Sales ledger or Purchase ledger

  1. Browse to one of the following menu options:

    • Sales > Enter / Change Journals > Enter / Change Customer Credit Notes / Credit Journals (option 222).
    • Purchase > Enter / Change Journals > Enter Change Supplier Credit Notes / Debit Journals (option 322).

  2. Posting Details > complete the following information:
  3. 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.
  4. Customer Details or Supplier Details > Code > enter the customer or supplier code. Alternatively, press F2 > select the relevant customer or supplier from the lookup list.
  5. Note: To process a contra entry, you must have the relevant company set up with both a customer and a supplier record. If you haven't done this already, TASBooks will prompt you to create the appropriate record for this company.

  6. Invoice Details or Credit Note / Journal Details > complete the following information:
  7. 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.

    Note: There's no VAT on this transaction, as VAT was calculated on the original invoices you entered on the Sales and Purchase ledger for this company.

    Total The total amount calculates automatically here.
  8. To save the journal > Save > when prompted to save the transaction > Yes.

Once you enter the contra journal, the transaction automatically posts to the customer and supplier accounts simultaneously, without using a vat rate.


What effect does a contra entry have on the nominal ledger?

This reduces the balance on the Sales Ledger Control account, which is a current asset and also reduces the Purchase Ledger Control account, which is a liability. By reducing the current asset, the total value that you are owed by your debtors has been reduced. In reducing the liability, the total value that you owe your creditors has been decreased.

What effect does a contra entry have on the customer and supplier account?

This posts an unallocated payment on both the customer and supplier account. The type is X for contra entry 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.

To allocate payments to outstanding invoices

  1. Browse to one of the following menu options:

    • Sales > Receipts > Enter / Allocate Sales Ledger Receipts (option 251).
    • Purchase > Payments on Account > Enter / Allocate Purchase Ledger Payments (option 351).

  2. Bank and Posting Details > Bank > choose None (Existing Receipt) or None (Existing Payment), as applicable.
  3. Code > enter the appropriate customer or supplier code. Alternatively, press F2 > select the relevant customer or supplier from the lookup list.
  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. To save the allocation > Save > Yes.
  9. To close the Enter / Allocate Sales Ledger Receipts or Enter / Allocate Purchase Ledger Payments window > Cancel.