Sage 50 Accounts
Automatic contra entries
Sometimes you might have a customer who is also a supplier, and you want to offset customer and supplier invoices. This is a contra entry.
You can not use Automatic Contra Entries if:
- If you operate a VAT Cash Accounting scheme.
- You need to offset 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 transaction.
Post manual contra entries – covered in next month’s newsletter.
Create a contra entry bank account.
- Go to Bank accounts, then select New.
- 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 you are using Sage’s default nominal ledger structure, use a number within the range of 1200 to 1239. These numbers are in the existing bank account 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 do not want to run a bank reconciliation for this bank account, select this.
- Click Save then click
How to post the contra entry
- Go to Customers or Suppliers, and then select Contra Entries.
- Select the contra entry Bank A/C, then select the relevant A/C Ref for both the Sales Ledger and the Purchase Ledger.
- Select the invoices to offset against each other from both windows, then click OK.
If there is a mismatch in values, you are prompted to part contra the lowest account.
For example, a £120.00 contra entry offsets a £120 sales invoice, leaving £30 outstanding on a £150 purchase invoice.
- To confirm this, click Yes.
The contra entry posts an SR and a PP to the contra entry bank account. The accounts are the value of the invoices, or the lessor value if applicable.
Reserve a contra entry
To reverse a contra entry, delete or reverse the transaction posted due to the contra entry. To do this, identify the transaction and delete or reverse them as usual.
If you would like any help with creating a contra bank account and or doing contras or if you need any other help with your Sage 50 Accounts, please contact us
