Contra entries (offset sales debt)
If you are dealing with a customer who is also your supplier you can offset your sales invoices against your purchase invoices, provided both accounts operate in the same currency. The purchase invoice effectively becomes a payment. This is commonly referred to as a Contra Entry.
The outstanding invoices on the selected customer account and supplier account are displayed. You can select the invoices to offset against each other individually or you can select several by specifying a date range.
Note: Other outstanding transactions such as credit notes or receipts are not shown and should be allocated using the Allocation screen.
When the invoices are selected the total amount, calculated as a positive or negative value, is displayed.
Once you save the contra entry, payment and receipt transactions are generated and allocated to the invoices. They are given a reference of Contra.
The balances on the accounts in Sales and Purchase Ledgers are adjusted and the appropriate nominal accounts in the Nominal Ledger are updated.
Note: This option does not apply cost centre breakdown.
- Sales, Purchase and Nominal Ledgers are updated to represent the debt reduction for both the customer and supplier accounts.
- Sales Ledger balances and the customer total balance are adjusted.
- Purchase Ledger balances and the supplier total balance are adjusted.
- Payment and receipt transactions are generated and allocated to the invoices.
To enter a contra entry
Open: Sales Ledger > Enter Transactions > Contra Entry.
- Select the Bank Account Nominal Code. This is the nominal account for the bank account that will be used for the adjustment.
- Enter the Transaction date to use.
- Select the customer Code.
- Select the supplier Code.
- To select individual entries, select the check box to the left of the Type column.
- To select transactions in a date range, enter a date in the Automatically select transactions up to this date box.
- Click Save.