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.

NOTE: *This field is mandatory.

1. Click Bank accounts then click New.
2. Enter the relevant details for the new bank account:
   

   A/C Ref*	The nominal code you want to use for the new bank account. NOTE: If using the Sage default nominal ledger structure, we recommend using a number within the range of 1200 to 1239. These numbers are included within the existing bank accounts and the management reports are set up for these numbers.
   Nominal Name	Enter a description for the new bank account, for example, Contra Entries bank account.
   A/C Type	Choose Cheque Account from the drop-down list.
   No Bank Reconciliation	If you don't want to run a bank reconciliation for this account, select this check box.

3. Click Save then click Close.

Step 2 - Post the contra entry

1. Click Customers or Suppliers then click Contra entries.
2. Choose the contra entry Bank A/C then choose the relevant A/C Ref for both the Sales Ledger and Purchase Ledger.
3. Select the invoices to be offset against each other from the Sales Ledger and Purchase Ledger then click OK.
   
   If there's a mismatch in the values, you're prompted to make a part contra for the lowest amount.

   EXAMPLE: If you've a sales invoice of £100.00 and a purchase invoice of £/€120, a contra entry of £/€100 is posted, leaving the purchase invoice outstanding for £/€20.

4. To confirm this click Yes.

The contra entry posts a sales receipt, SR, and a purchase payment, PP, to the contra entry bank account for the value of the invoices, or the lesser value if applicable.

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.

1. Click Bank accounts then click New.
2. Enter the relevant details for the new bank account:

   A/C Ref*	The nominal code you want to use for the new bank account. NOTE: If using the Sage default nominal ledger structure, we recommend using a number within the range of 1200 to 1239. These numbers are included within the existing bank accounts and the management reports are set up for these numbers.
   Nominal Name	Enter a description for the new bank account, for example, Contra Entries bank account.
   A/C Type	Choose Cheque Account from the drop-down list.
   No Bank Reconciliation	If you don't want to run a bank reconciliation for this account, select this check box.

3. Click Save then click Close.

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.

NOTE: *This field is mandatory.

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

   Account Ref	The contra entry bank account appears.
   Account*	Choose the required customer from the drop-down 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 box for the relevant SI or SP. This should be the lower value of the contra entry. For example, if the SI is £200.00 and the PI is £150.00, you should enter £150.00 here.

3. Click Save then click Close.

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.

NOTE:  *This information is mandatory.

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

   Payee*	Enter the required supplier's account reference.
   Date*	Enter the date for the purchase payment. NOTE: The date used should be the same as the date used for the customer receipt posted.
   Payment	To allocate the money paid to the relevant invoice items, enter the required value in the Payment box of the invoice item line. This should be the same value as the sales receipt. For example, enter £150.00 against the relevant outstanding invoice.

3. Click Save then click Close.

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

Manually contra payments on account or credits

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.

NOTE: *This information is mandatory.

1. Click Bank accounts then click New.
2. Enter the relevant details for the new bank account:

   A/C Ref*	The nominal code you want to use for the new bank account. NOTE: If using the Sage default nominal ledger structure, we recommend using a number within the range of 1200 to 1239. These numbers are included within the existing bank accounts and the management reports are set up for these numbers.
   Nominal Name	Enter a description for the new bank account, for example, Contra Entries bank account.
   A/C Type	Choose Cheque Account from the drop-down list.
   No Bank Reconciliation	If you don't want to run a bank reconciliation for this account, select this check box.

3. Click Save then click Close.

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.

1. Click Bank accounts, select the contra entry bank account then click Customer refund.
2. Complete the Customer Refund window as follows:
   

   Bank A/C Ref	The contra entry bank account appears.
   Payee*	Choose the required customer from the drop-down list.
   Date	Enter the date for the sales payment. The program date appears automatically but can be overwritten.
   Amount	Enter the required value in the Amount box of the relevant SC or SA. This should be the lower value of the contra entry. For example, if the SC or SA is £200.00 and the PC or PA is £150.00, you should enter £150.00 here.

3. Click Save then click Close.

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.

NOTE: *This information is mandatory.

1. Click Bank accounts, select the contra entry bank account then click Supplier refund.
2. Complete the Supplier Refund window as follows:
   

   Payee*	Enter the required supplier's account reference.
   Date*	Enter the date for the purchase payment. NOTE: The date used should be the same as the date used for the customer receipt posted.
   Amount	To allocate the money paid to the relevant items, enter the required value in the amount box of the relevant PC or PA. This should be the same value as the sales payment. For example, enter £150.00 against the relevant outstanding PC or PA.

3. Click Save then click Close.

The purchase receipt, PR, posts, and the balance on the contra entry bank account should now be zero.