In TallyPrime, recording contra vouchers for internal transfers between your accounts is most accurate and informative when using double-entry mode.
This method ensures a complete picture of the transaction by reflecting both the source and destination of the funds.
Here’s a detailed explanation of recording contra vouchers in double-entry mode with an example:
1. Recording a Contra Voucher in Double-Entry Mode in TallyPrime:
1. Go To Vouchers:
Launch TallyPrime and navigate to the “Vouchers” menu.
You can use two methods to access the voucher creation screen:
- Press
Alt+G
(Go To) and choose “Create Voucher” or type “Vcr” and pressEnter
. - Alternatively, use the shortcut key
F4
to directly create a contra voucher.
2. Verify Double-Entry Mode:
While creating the voucher, ensure the voucher type is set to “Contra” (F4).
Double-check that TallyPrime is in double-entry mode by looking for the “Use Single Entry Mode for Payment/Receipt/Contra” setting in F12: Configure
.
This setting should be set to “No” for double-entry mode.
3. Enter Transfer Details:
Fill in the following details:
- Date: The date of the internal transfer.
- Particulars: A brief description of the transfer, for example, “Transfer from Savings to Current Account.”
- Double-Entry Focus: Since you’re using double-entry, you need to record both sides of the transaction:
- Debit: Select the account from which you’re transferring the funds (e.g., Savings Account). This account will be debited as the funds are leaving.
- Credit: Select the account where you’re transferring the funds to (e.g., Current Account). This account will be credited as the funds are received.
- Amount: Enter the amount of money being transferred.
- Narration (Optional): Add a more detailed explanation of the transfer if needed.
4. Save and Verify:
Once you’ve entered the details, press Ctrl+A
to save the contra voucher.
Double-check the information for accuracy before saving.
2. Example: Transferring Funds (Double-Entry Mode):
Let’s revisit the previous example of transferring ₹10,000 from your Savings Account (Bank A/c 1) to your Current Account (Bank A/c 2) within your business, but this time using double-entry mode:
- Date: The current date
- Particulars: Transfer from Savings to Current Account
- Debit: Bank A/c 1 (Savings Account)
- Credit: Bank A/c 2 (Current Account)
- Amount: ₹10,000
3. Benefits of Double-Entry Mode:
1. Accuracy:
Double-entry ensures a complete and accurate record of your financial transactions, reflecting both the decrease in the source account and the increase in the destination account.
2. Error Detection:
Double-entry helps identify errors more easily. If your debits and credits don’t balance, it indicates a potential mistake in your entries.
3. Financial Clarity:
This mode provides a clear picture of your overall financial position by tracking all movements of funds within your business.
4. In Conclusion
Recording contra vouchers in TallyPrime’s double-entry mode is the recommended approach for accurate and informative accounting.
It ensures a balanced and comprehensive record of your internal transfers, laying the foundation for better financial analysis and decision-making.
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