Manual contra entries for invoices

If you have a customer who is also a supplier, you can offset outstanding customer sales invoices (SI) and supplier purchase invoices (PI).

You can also pay off sales payments (SP) or purchase receipts (PR) that post when you refund a customer or supplier. This is a contra entry.

Create a contra-entry bank account

To record a contra entry, you post a Sales Receipt (SR) and a Purchase Payment (PP). Create a separate bank account for contra entries to keep these transactions out of your main bank account.

1. Go to Bank accounts, then select New.
2. Enter the relevant details for the new bank account:
   NOTE:

   *This field is mandatory.

    
   

   A/C Ref*	The nominal code you want to use for the new bank account. NOTE: If using the Sage default nominal ledger structure, use a number within the range of 1200 to 1239. These numbers are in the existing bank accounts range in the Chart of Accounts.  This ensures that the bank balances appear correctly on your Management reports.
   Nominal Name	Enter a description for the new bank account, for example, Contra Entries bank account.
   A/C Type	Select Cheque Account from the dropdown list.
   No Bank Reconciliation	If you don't want to run a bank reconciliation for this account, select this checkbox.

3. Press Save then Close.

Post a sales receipt using the contra-entry bank account

To clear the outstanding SI or SP on the customer's account, post an SR using the contra-entry bank account.

1. Go to Bank accounts, select the contra-entry bank account, then click Customer receipt.
2. Complete the Customer Receipt window as follows:
   
   NOTE:

   *This field is mandatory.

   Account Ref	The contra entry bank account appears.
   Account*	Choose the required customer from the dropdown list.
   Date	Enter the date for the sales receipt. The program date appears automatically but can be overwritten.
   Receipt	Enter the required value in the Receipt field for the relevant transaction. This is the lower value of the contra-entry. For example, if the SI is £200.00 and the PI is £150.00, enter £150.00.

3. Press Save then Close.

Post a purchase payment from the contra-entry bank account

To clear the outstanding PI or PR on the supplier's account, post a PP using the contra-entry bank account.

1. Go to Bank accounts, select the contra-entry bank account, then click Supplier payment.
2. Complete the Supplier Payment window as follows:
   
   NOTE:

   *This field is mandatory.

   Account*	Enter the required supplier's account reference.
   Date*	Enter the date for the purchase payment. NOTE: Use the same date as the date used for the customer receipt.
   Payment	Enter the same value as the SR in the Payment box of the invoice item line. For example, enter £150.00 against the relevant outstanding invoice.

3. Press Save then Close.

The supplier payment posts, and the balance on the contra-entry bank account will now be zero.

Reverse a contra entry

To reverse a contra entry, delete or reverse the transactions posted due to the contra entry. To do this, identify the transaction and delete or reverse them as usual.

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• Post automatic contra entries