Supplier Contra Payments

Contra payments allow you to record the revenue and tax on sales for the goods and services provided to your contra partner. It also records the expense and tax on purchases for the goods and services provided to you by them. It uses a Contra Clearing GL control account that should reconcile to zero on a per contra deal basis and requires no manual journals.

Configuration for Contra Transactions

1. Configure a Contra Clearing GL account in addition to other system clearing accounts. Configure it as a Control Account.
2. Configure a Transaction Method with the following information:
   • Code - CTR
   • Description - Contra
3. Configure a Receivable Transaction Type with the following information:
   • Type - ADJ
   • Source - AR
   • Method - CTR (created in step 2)
   • Description - AR ADJ Contra Payment (-Cr)
4. Configure corresponding transactions for any other sources you need such as PP and EM.
5. Configure the GL distribution on the new transaction type(s) to the following:
   • Credit - Contra Clearing (created in step 1)
   • Debit - Trade Debtors
6. Configure a bank account with the following information:
   • Code - CT
   • Description - Contra Payments
   • GL Account - Contra Clearing

Process Contra Transactions

1. Invoice the contra partner for the goods & services you are providing as normal.
2. Navigate to the contra partner's Receivable Ledger.
3. Pay off the portion of the invoice covered by the contra deal using the contra transaction type created in step 3 above. Be sure to enter the amount as a negative value.
4. Process the voucher for the services your contra partner has provided to you as normal.
5. From the Payment Processing screen, add a payment, change the bank account to Contra Payments and the pay method to Wire.
6. Enter the invoice number from step 1 in the reference field. Select the voucher processed in step 4.
7. Click OK.
8. Create an AR journal for the adjustment added in step 3 of process contra transactions. Generate, approve and then post the journal. 
9. Once the AR and AP journal entries are posted, reconcile the transactions in the Contra Clearing Account so they net to zero. You can access this screen via the GL Inquiry screen. Select the Contra Clearing Account, right-click and select Tools -> GL Reconciliation. 
10. From the Payment Reconciliation screen, mark the transaction as cleared to clear it off the Contra Payments bank account.