Summary
Description
You would normally do a Contra Entry from the menu options Suppliers (Purchase Ledger) , Enter Transactions, Contra Entry
The software will automatically allocate the outstanding invoice(s) in both the Supplier and Customer Ledgers together.
Some users prefer to do a manual entry to allow for allocation at a later date but still wish to record the Contra Entry or part of the Contra entry today. It also allows for more control over the Reference and Narrative on the transaction as the user can type in characters of their choice during data entry.
Resolution
Suggested Method
Overview : Enter an Internal Purchase Credit Note and an Internal Sales Credit Note, for the same amount, to the same Nominal Code. Your VAT Analysis Code (Tax Code) would need to be Non-Vatable e.g. Code 9 so there is no effect on the VAT Return.
- Go to Suppliers, Enter Transactions, Purchase Credit Note, and choose your supplier and enter an appropriate Credit note date.
Type in your value and ensure you change the VAT Analysis Code to 9 (or your equivalent Non-Vatable VAT Code).
Enter a Nominal Code of Suspense e.g. 9998 and Save.
- Go to Customers, Enter Transactions, Sales Credit Note, and choose your customer and enter an appropriate Credit note date.
Type in your value to match the Supplier Credit Note you entered earlier and ensure you change the VAT Analysis Code to 9 (or your equivalent Non-Vatable VAT Code).
Enter a Nominal Code of Suspense e.g. 9998 and Save.
You will now have reduced the balance on both the Supplier Account and the Customer Account by the same amount.
- The Nominal Ledger will have been Debited and Credited on the same Nominal Code (9998) so there is no overall effect on the Nominal Ledger.
- At some point in the future when appropriate to any more manual contra entries you have input, it would be advisable to manually allocate the Invoices and Credit Notes on the account to tidy up the allocations. You would do this in Suppliers, Enter Transactions, Purchase Allocations and then Customers, Enter Transactions, Sales Allocation.
More information on Allocations is shown in the Sage 200 Standard Online Help accessible to all users whilst logged into the software. Search for “Allocating Transactions”.