How do I deal with contras?
This article will explain what a contra is and how to handle one in Platinum.
The word Contra here is used in the sense of setting one amount against another, where no money changes hands. For example, you may have a customer who is also a supplier, and you owe them £100 and they owe you £125. If you agreed to "contra" the balances, your supplier should send you a payment of £25, i.e. £125 - £100, the difference between the two values, and the £100 is "contra'd".
Entering a Contra
Two entries must be made for any contra, one in one direction and one in the other direction so that there is no overall effect on the company - you are simply matching one entry off against another.
Go into " Sales Ledger Receipts".
- At the "Customer:", type in the customer's code if known, or search for the customer.
- Pay off the invoices and credit notes shown to the value of the agreed contra. In the example above, this would be £100 and would leave a £25 balance. This may involve making a part payment against an invoice or credit note.
- Press [Done] when the payment total is correct.
- At "Cheque no./Comment", type 'Contra'.
- At "Payment centre", type 'Z990' Suspense Account.
- Press [Done] then choose [Accept]. You are now able to go back in and pay the invoice off with the new cheque or leave it unpaid until your next payment run.
|Try and avoid Bank or Cash Accounts as no money changes hands.|
This sorts out the customer side of the contra. If there is an additional balance that has been paid by the customer, post this as normal.
Go into " Purchase Ledger Payments".
- Carry out the same process as for the Sales Ledger above, paying particular attention to the "Value" and the "Payment centre:".
|The Value and the Payment Centre must be the same value for the contra to work.|
- How do I Find a Customer or Supplier?
- Posting payments received
- Paying suppliers
- Recommended accounting routines