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Contra entries

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Summary

How to process automatic and manual contra entries in Sage 50 Accounts, to offset outstanding customer and supplier invoices.

Description

If you have a customer who is also a supplier, you may want to offset outstanding customer and supplier invoices. This is known as making a contra entry.



 CAUTION: Automatic Contra Entries should not be used with: 
  • Sage 50 Accounts Essentials
  • Sage 50 Standard
  • If you operate the VAT Cash Accounting scheme
  • To offset outstanding credit notes (SC, PC), outstanding refunds (SR, PR) or payments on account (SA, PA)
  • CIS transactions - you can use the manual routine, however, CIS transactions can't be part paid
  • Non-base currency transactions

Manual contra entries need to be used for these instead, using the steps below.

Resolution

Automatic contra entries


Step 1 - Create a contra entry bank account

To record a contra entry, a sales receipt and a purchase payment must be posted. To prevent these from appearing in the main bank activity, a new bank account should be created which is only used to record contra entries.

Step 2 - Post the contra entry


Manually contra SI, PI, SP or PR transactions

Step 1 - Create a contra entry bank account

To record a contra entry, a sales receipt and a purchase payment must be posted. To prevent these from appearing in the main bank activity, a new bank account should be created which is only used to record contra entries.


Step 2 - Post a sales receipt using the contra entry bank account

To clear the relevant outstanding sales invoice or sales payment on the customer's account, post a sales receipt to the customer's account using the contra entry bank account.


Step 3 - Post a purchase payment from the contra entry bank account


To clear the relevant outstanding purchase invoice or purchase receipt on the supplier's account, post a purchase payment to the supplier's account using the contra entry bank account.



Contra payments on account or credits

Allocate credits or payments on account to invoices in the Bank module before using the Contra Entries option.

If you don't have any invoices to allocate to, follow the manual steps.


Step 1 - Create a contra entry bank account

To record a contra entry, a sales payment, SP, and a purchase receipt, PR, must be posted. To prevent these from appearing in the main bank activity, a new bank account should be created which is only used to record contra entries.


Step 2 - Post a sales payment using the contra entry bank account

To clear the relevant outstanding credit note or payment on account, on the customer's account, post a sales payment, SP, to the customer's account using the contra entry bank account.


Step 3 - Post a purchase receipt from the contra entry bank account

To clear the relevant outstanding credit note, PC, or payment on account, PA, on the supplier's account, post a purchase receipt, PR, to the supplier's account using the contra entry bank account.



Reverse a contra entry

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



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  More support and information is available 

Get the most out of your software, stay ahead with trending topics and get answers from thousands of articles using the Sage Knowledgebase. Visit the Help Centre >