I need help with contra entries, please. I mean this one when your supplier is your customer at the same time. I have Sage instant accounts. I read through some old post but still not quite get it. I thought I can do it via journal, but how?
I read something about dummy account, but not quite understand concept. and anyway, is it necessary?
I though, maybe, that I can just pay the difference in the payment option, or maybe make credit note on the amount of difference and name it contra entries.
Forgetting about Sage for a moment, if you have a customer who owes you £100 (i.e. an asset with a balance of 100 - therefore a debit value), and a supplier to whom you owe £100 (i.e. a liability with a balance of 100 - therefore a credit value), and these are the same company, you can do the following journal entry to match one against the other, zeroing them both:
Cr customer account 100 Dr supplier account 100
Of course, you would also have to update the control accounts to follow:
Cr customer control account 100 Dr supplier control account 100
as well as telling the company you have done this so that they can update their records to match.
As for doing that in Sage, I don't know. I would guess (hope) that inputting the first journal entry, between the specific customer and supplier accounts, will update the two control accounts automatically as well. Someone else will have to tell you about that.
If the values are different, use the lower of the two to clear one balance, and have the remainder left on the other.
I know there is no option of this in instant accounts, however there was one way... Unfortunately I lost my notes... Thanks any way, and AliG way is, i reckon, I quite good :D
-- Edited by Alia on Tuesday 2nd of October 2012 10:24:57 AM
Unfortunately you can only do contra entries in Accounts Plus or above.
I dont advise posting journals to the control accounts as the day books wont agree.
A quick workaround could be to just pay & receive the invoices via the bank screen - generating matching bank transactions that can be reconciled (contra'd off) together.
Hope that helps.
Jeremy
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Personally, I would consider creating a payment and receipt into the bank account, where you can note clearly your intentions, and then reconcile the bank cr/dr together. This would be fairly quick and simple.
I know there is no option of this in instant accounts, however there was one way... Unfortunately I lost my notes... Thanks any way, and AliG way is, i reckon, I quite good :D
-- Edited by Alia on Tuesday 2nd of October 2012 10:24:57 AM
My way was the same as Ali's
Glad it is sorted
Cheers
Jeremy
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Oops... Sorry Jeremy... I didn't mean to steal the show. You obviously type quicker than I do, I hadn't realised another reply had been posted. I definitely think that you're way is the best way ;)
Paying the supplier and entering a corresponding sales receipt from the customer isn't what I'd call "a quick workaround" - it's quite simply the best way to go about doing this. Amongst other things, if your VAT is done on a cash basis, this approach handles the VAT correctly.
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