In short
- Money moved between the client's own bank and cash accounts is a Contra (F4).
- Money that left the bank for anyone else is a Payment (F5); money that came in from anyone else is a Receipt (F6).
- Journal (F7) is for adjustments that don't move money, such as reclassifying an entry or recording a non-cash expense.
- One Payment can carry several debit ledgers, so an EMI splits into principal and interest inside a single voucher.
On this page
Tally has four accounting voucher types that touch the bank, and the shortcut keys are the same in TallyPrime and Tally.ERP 9: F4 Contra, F5 Payment, F6 Receipt and F7 Journal (Tally's key reference). Picking the right one affects more than tidiness. The Day Book, the cash flow, the receipts and payments account and bank reconciliation all group entries by voucher type.
The one-question rule
| Where did the money go? | Voucher | Bank ledger is |
|---|---|---|
| From the client's bank to someone else | Payment (F5) | Credited |
| From someone else into the client's bank | Receipt (F6) | Debited |
| Between the client's own bank and cash, or two of its banks | Contra (F4) | Debited or credited, with the other own account on the opposite side |
| Nowhere: an adjustment between ledgers | Journal (F7) | Usually not involved |
Reference table: 18 everyday bank entries
| Bank statement entry | Voucher | Debit | Credit |
|---|---|---|---|
| Customer pays an invoice (UPI, NEFT, cheque) | Receipt | Bank | Customer (Sundry Debtors) |
| Marketplace settlement (Amazon, Meesho, Flipkart) | Receipt | Bank | Marketplace party ledger |
| Payment gateway settlement (net of fees) | Receipt | Bank | Gateway party ledger |
| Supplier paid | Payment | Supplier (Sundry Creditors) | Bank |
| Rent, electricity, internet | Payment | Expense ledger | Bank |
| Salaries | Payment | Salaries or Salary Payable | Bank |
| Bank charges and GST on them | Payment | Bank Charges (+ input GST if claimable) | Bank |
| Interest credited by the bank | Receipt | Bank | Interest Received |
| Loan EMI auto-debit | Payment | Loan account (principal) + Interest on Loan | Bank |
| Loan disbursed into the account | Receipt | Bank | Loan account |
| GST paid (challan) | Payment | CGST / SGST / IGST ledgers | Bank |
| TDS paid (challan) | Payment | TDS Payable | Bank |
| Cash withdrawn from the bank | Contra | Cash | Bank |
| Cash deposited into the bank | Contra | Bank | Cash |
| Transfer between the client's two banks | Contra | Receiving bank | Paying bank |
| Owner puts in money | Receipt | Bank | Capital account |
| Owner takes money out | Payment | Drawings or Capital account | Bank |
| Customer cheque returned unpaid | Payment | Customer (reverses the receipt) | Bank |
The entries that need a second look
Loan EMIs
The statement shows one debit for the full EMI. In the books it's two things: repayment of the loan (reduces a liability) and interest (an expense). Use a single Payment voucher with two debit lines, principal to the loan account and interest to Interest on Loan, using the split from the lender's repayment schedule. If you don't have the schedule yet, post the whole EMI to the loan account and move the interest with a Journal once it arrives.
Bank charges and GST
Bank service charges usually carry GST. If the client is GST-registered and the bank reports the charges against the client's GSTIN, the GST portion can generally be claimed as input tax credit, so split it into the input GST ledger rather than burying it in Bank Charges. Check that it appears in the client's GSTR-2B before claiming.
Marketplace and gateway settlements
Amazon, Meesho or a payment gateway pays the net amount after commission, fees and TCS. Post the bank receipt against the marketplace's party ledger, then record the commission, fees and TCS from the settlement report, so the party ledger clears to zero. Recording the net amount as sales understates both sales and expenses, and won't match the GSTR-1 built from the marketplace reports (see GSTR-1 for e-commerce sellers). The marketplace payout guide walks through every entry with a worked month.
Cash deposits
A cash deposit is a Contra only if the cash was already in the client's books. Cash collected from a customer and deposited straight away can be posted as a Receipt from that customer instead. Ask, rather than defaulting to Contra.
Mistakes that show up at year end
- Transfers between the client's own banks posted as Payment and Receipt, which inflates both totals by the same amount.
- Cash withdrawals posted to an expense because nobody asked what the cash was for.
- EMIs posted entirely as interest, so the loan balance never comes down.
- GST on bank charges lost in Bank Charges, so a claimable credit is never claimed.
- Bounced cheques left in place, so the customer looks paid when they aren't.
Setting voucher types in bulk
For a month of statement lines, choosing the voucher type one entry at a time is the slow part. FileKey suggests a voucher type and a ledger for every row of a converted statement: receipts, payments, contras for cash withdrawals and deposits. You change any you disagree with, then download Tally XML for Alt+O › Transactions. The export can produce Payment & Receipt vouchers or Contra vouchers, with your bank ledger name. See the bank statement to Tally converter, and how to import it into TallyPrime.
Frequently asked questions
What is a contra entry in Tally?
A Contra (F4) records money moving between the client's own cash and bank accounts, or between two of its bank accounts: cash withdrawals, cash deposits and transfers. No outside party is involved.
Is a bank charge a Payment or a Journal in Tally?
A Payment (F5), because money left the bank: debit Bank Charges (and input GST if claimable), credit the bank.
How do I enter a loan EMI from the bank statement in Tally?
As one Payment voucher with two debit lines, principal to the loan account and interest to an interest expense ledger, and the bank credited for the full EMI. Use the lender's repayment schedule for the split.
Should a cash deposit always be a Contra?
Only when the cash was already in the books. Cash collected from a customer and deposited directly can be a Receipt from that customer.
What are the shortcut keys for vouchers in TallyPrime?
F4 Contra, F5 Payment, F6 Receipt and F7 Journal, from the accounting voucher screen.
Sources and further reading
Rules change by notification and advisory. Check the GST portal before you file.
Written by the FileKey Team
FileKey builds the tools CA firms use for e-commerce GSTR-1 and bank statement conversion. We write these guides from the questions accountants and sellers ask us every filing month. Spotted something out of date? Write to [email protected] and we will fix it. More about FileKey.