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Contra or Credit in Sage

sarahwilsonsarahwilson Experienced MentorRegistered Posts: 567
We have a customer who is also a supplier in Sage. They only use us rarely and vice versa. It so happens that 6 weeks ago we did some work for them and invoiced them, now they are doing some work for us on our website thats the same value.

I think they should invoice us, as we have already invoiced them and then the accounts be contra'ed (?) against each other on both sets of ledgers. My colleague says it will be easier to do a credit note on our sales ledger and input nothing on the purchase ledger, which I can see it will be but thats not showing accurately what has occurred is it?

Which is correct?

Comments

  • columbiacolumbia Experienced Mentor Registered Posts: 580
    I'd ask for them to invoice you, then offset as a contra, because as you say if you credit the original invoice it would not be an accurate picture of the transactions that have taken place.

    Hope this helps.

    Tracy
  • GianniGianni Feels At Home Registered Posts: 99
    I would definately get a purchase invoice from them. This acts as proof that they have carried out the service and that you have accepted it.

    I would also have it written that you have both agreed to contra the invoices.
  • sarahwilsonsarahwilson Experienced Mentor Registered Posts: 567
    Thanks for the replies, I thought it best to contra so we could show what had happened accurately but you never know!!
  • mary@adorable.co.uk[email protected] New Member Registered Posts: 5
    Contra

    Receiving an invoice from you supplier and posting it through your purchase ledger will also keep your VAT records straight and include the purchase value and input tax in the right boxes on the VAT 100

    Definitely have an invoice from them and contra the entries in Sage.
  • Jon_1984Jon_1984 Well-Known Registered Posts: 186
    Would agree with the above - there is some VAT guidence some where that states you must provide VAT invoice or receipt for this sort of situation.

    As a further point how does everyone else handle contras on their system - we simply load the sales and purchase invoices on the debtors and creditor accounts and then put a payment from the bank account to both the sales and purchase accounts that cancel each other out.........
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