How to do Contra without use Journal Voucher

Overview:

A contra account is an account that is used to reduce the value related account on the financial statements. Contra account have opposite balance to the associated accounts they offset

Scenario:

You buy product from Company B (Supplier), and you also provide services to Company B (Customer)

At the end of the month, you owe Company B RM 1,000 for purchased, while Company B owes you RM 700 for the services rendered

Expected result will be show in aging you still owe Company B RM300.

Solution:

1. Create a Company B in supplier (E.g Supplier code = 800-C001)

2. You owe Company B RM 1,000 for purchased. Create a Purchase Invoice, select supplier as Company B

 3. Create a Company B in Customer (E.g Customer Code = 700-C002)

 4. Company B owes you RM700 for the services rendered. Create a Sales Invoice, select customer as Company B

 5. Before proceed contra transaction, please ensure both parties have agreed on the contra.

 6. Compare Customer outstanding (RM 700) & Supplier outstanding (RM 1,000) whichever lowest total amount in order to         proceed contra. For this example we will take Customer outstanding amount RM700 to proceed contra.

 7. Create a Customer Credit Note for contra purpose and knock off outstanding invoice 

   (You may need to create a contra account code in your balance sheet item)

 8. Create a Supplier Credit Note for contra purpose and knock off outstanding invoice

 (Select back the contra account which you have applied in Customer Credit Note)

 9. Generate Customer Ledger Report & Supplier Ledger Report for show total amount have fully contra and still owe your           supplier RM 300 which need to made payment for settlement.

Tips: 

You may need to create a contra account code in your balance sheet item and need to ensure the contra balance is always to be 0 to ensure you didn’t miss out another side of contra