Here is the fully aligned article, with the corrected logic (“complete the double entry” via contra entries), your practical examples, and consistent terminology throughout.

The Auto Balance setting allows users to ensure that journals remain balanced by automatically generating contra entries per date against a predefined account. This supports accurate accounting while handling real-life timing differences in transactions.

When creating a journal using auto balance, the user selects an auto balancing account at the top of the entry. This account is used by the system to generate balancing entries where required.

The user then enters the journal lines, including their respective dates and nominal accounts. The system evaluates the entries per date, ensuring that each date satisfies the double-entry requirement.

If, for a given date, the entries do not form a complete double entry, the system will:

This contra entry completes the double entry for that date, ensuring that total debits and credits are equal without altering the original entries.

Each date within the journal is therefore treated independently and remains fully balanced.

In accounting, it is essential that journals balance at each individual date, as financial records and reports rely on accurate balances at specific points in time.

However, in practice, some transactions naturally span multiple dates or are recorded in batches. In these situations, it is not always possible to form a complete double entry within the same date using only the original transaction lines.

The auto balance setting addresses this by:

This ensures that operational realities do not compromise accounting accuracy.

This functionality is intended for:

The auto balance setting is particularly useful in real-life situations where transactions cannot naturally balance on the same date or are recorded in batches.

Bank transfers between accounts
A common example is a transfer between two bank accounts that settles on different dates.

For instance:

Although this correctly reflects the movement of funds, the entries do not form a complete double entry on each date:

With auto balance enabled:

This ensures that:

Employee expense reimbursements (batched processing)
Another example is employee expense reimbursement processed in batches.

For example:

In this case:

With auto balance enabled:

Using the auto balance setting provides the following benefits:

The Auto Balance setting ensures that journals remain balanced per date by automatically creating contra entries against a predefined account. This allows organisations to handle real-world timing differences and aggregated postings while maintaining compliance with core accounting principles and ensuring accurate financial reporting.

You need to record gas, food and printing paper expenses for the month of May in a journal and post it against your Nominal Ledger. Find out how it should be posted in the collapsible section below.

Some accountants, though, decide to speed up the above process by creating a single credit line totalling all the recorded debits (or vice versa), if the account involved is always the same. (e.g. *Cash Account). 👇

While the Total Batch Amount would still be zero (170€ debits (VAT. incl.) = 170€ credits), there isn't a credit and a debit offsetting each other for each transaction's date, which is against the double-entry principle.
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Therefore, the system will throw an error message as the transaction is not balanced on each date. ⬆️
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