Contra postings are used in the event where a customer is also a supplier,
and there are outstanding invoices on both the debit and credit accounts. I.e.
the customer has received an invoice from yourself but as your supplier,
money is owed to them. Instead of them paying you the full amount of your
invoice and you paying them the full amount on their invoice, contra postings
can be used to off-set the debit and credit accounts so that they only the
difference between the debit and credit amounts is owed. For example if you
have invoiced the customer for £100 and they have invoiced you £80, you
would use contra postings to clear the £80 from both the sales ledger and
purchase ledger accounts and they would still owe you £20. If you have
invoiced the customer £50 and they have invoiced you £65, you would use
contra posting for the £50 and you would still owe them £15. I.e. you always
use the lower amount in the contra posting.
1. Firstly you should check whether you have a contra posting control
account set up. It should be in the Balance Sheet, Current Assets section
of your nominal ledger. Refer to instructions on creating a new nominal
account if you need to set one up. Alternatively, the suspense nominal
account can be used if you do not want a designated contra posting
control nominal account.
2. Click Gx Sales from the toolbar.
3. Select Cash Received from the menu.
4. Control Total - enter the amount of the contra posting.
5. Account Code - enter the customer account.
6. Posting Date - confirm the posting date. Be careful to ensure you post
this transaction to the correct financial period.
7. Cheque Date - enter the transaction date i.e. the date the posting actually
occurred.
8. Cheque Number - enter a reference such as "contra"
9. Cheque Amount - enter the amount of the contra posting. Remember it is
the lower of the amounts owed to or by the customer.
10. The outstanding invoices for this account will be displayed on the
bottom right section of the screen headed Transactions to be matched.
Allocate the contra payment to invoices by ticking the check-boxes in the Match column. If the amount of the contra payment is less that the
outstanding amount on the invoice, it will prompt you to create a discount
transaction for the difference. Choose No so the amount underpaid
remains outstanding on the account. The customer still owes you this.
11. Click the Save button.
12. Then click the Update button to post the sales ledger contra posting to
the ledger.
13. A popup box appears showing the default Bank Account Nominal
Code. From the drop-down menu, select the Contra Postings Nominal
Account or the Suspense Nominal Account.
14. Click the Ok button. The contra payment will now show on the
customer's account and you can use Customer Transaction Enquiry
to
view it and the invoices it has paid.
15. If you haven't already done so, you must now post the Purchase
Ledger contra posting for the same amount as the sales ledger contra
posting.
16. When both the sales ledger and purchase ledger sides of the contra
posting have been posted, check the Nominal Transaction Enquiry
for the
Contra Postings nominal account to make sure the balance is zero.