Post automatic contra entries

How to process automatic 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 and supplier invoices. This is a contra entry.

• If you operate the VAT Cash Accounting scheme
• You need to offset outstanding customer or supplier transactions other than invoices. For example, customer credit notes (SC) with supplier credit notes (PC)
• CIS transactions - you can post manual contra entries for the full value of CIS transactions only
• Non-base currency transactions

Post manual contra entries instead.

Automatic contra entries

---

Create a contra entry bank account

To record a contra entry, the software posts 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.

---

Post the contra entry

1. Go to Customers or Suppliers, then select Contra Entries.
2. Select the contra entry Bank A/C then relevant A/C Ref for both the Sales Ledger and Purchase Ledger.
3. Select the invoices to offset against each other from both windows, then click OK.

If there's a mismatch in the values, you're prompted to part contra the lowest amount.

For example, a £/€100 contra entry offsets a £/€100 sales invoice, leaving £/€20 outstanding on a £/€120 purchase invoice.

4. To confirm this click Yes.

The contra entry posts an SR and a PP to the contra entry bank account. The amounts are for the value of the invoices, or the lesser value if applicable.

---

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.

 

 

• Manual contra entries for invoices