How to do a Contra Entry

Contra Entries use two accounts, you will need to create a customer and a supplier account for the same person.

For a Contra Entry, we need to journal the smaller amount and either do a receipt or payment for the bigger amount (depending which side the bigger amount is on)

Example. 

The first thing to do is look at both sides totals.

• I sold something for a total of €123.
• I also bought something for a total of €250 from the same person.

Take the smaller total, that is the one being journaled in the  (€123 in this case)

• Go to Books > Journal Adjustments > Debtors journal and put that smaller amount on the credit side (put against any nominal…sundry will do, just make sure you pick the same nominal for the next step also)

• Again go to Books > Journal Adjustments > Creditors journal and put that smaller amount on the Debit side (Using the same nominal as we did in the previous step)

Then for the last part we simply need to take the difference between the bigger and smaller amounts

I sold something for €123

I bought something for €250

----------------------------------------

The difference is €127

 If the bigger amount is on the supplier account, make a bank payment for that difference of 127.

 If the bigger amount is on the customer account, make a cash receipt for that difference of 127.

That's the last step, you have successfully entered a Contra Entry!