Manual contra entries for invoices

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

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

Manually contra invoices  

 

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Create a contra entry bank account

To record a contra entry, you post a Sales Receipt (SR) and a Purchase Payment (PP). To prevent the transactions appearing in your main bank account, create a new bank account which you can use for contra entries.

NOTE: *This field is mandatory.

1. Go to Bank accounts, then select 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, 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 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.

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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.

NOTE: *This field is mandatory.

1. Go to 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 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. Click Save then click Close.

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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.

NOTE:  *This information is mandatory.

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

   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. Click Save then click Close.

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

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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.

 

 

 

• Post automatic contra entries