Contra entries (offset purchase debt)

If you are dealing with a supplier who is also your customer you can offset your purchase invoices against sales 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 transactions on the selected customer and supplier accounts are displayed. You can select the entries to offset against each other individually, or you can select several by specifying a date.

When the entries are selected, the total amount, calculated as a positive or negative, 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 the Sales and Purchase Ledgers are adjusted and the appropriate nominal accounts updated.

Note: This does not apply cost centre breakdown.

• The Sales Ledger, Purchase Ledger and Nominal Ledger are updated to represent the debt reduction for both the customer and supplier accounts.
• Purchase Ledger balances and the total supplier balance are adjusted.
• Sales Ledger balances and the total customer balance are adjusted.
• Payments and receipt transactions are created and allocated to the invoices.