How to Process Contra AR/AP Accounts

How to:   Process ‘Contra-accounts’

  1. This procedure defines how to offset an accounts receivable item against an accounts payable item.
  2. Setup procedure:
    1. Under menu ‘SystemOptions/Chart of Accounts’ add a new general ledger account for ‘Contra AR/AP’ with an account class of ‘Other Assets’

      Comsense Enterprise; shows Chart of Accounts in the Navigation menu and the Contra AR/AP account.
    2. Under menu ‘SystemOptions/Account Assignments’ in the ‘Customer Payment Adjustments’ tab, enter a new row for the new contra account.

      Comsense Enterprise; shows Account Assignment in the Navigation menu, Contra AR/AP account assigned to the Customer Payment Adjustments.
  3. Processing the transactions:
    1. Enter a miscellaneous payable:
      1. A supplier master will need to be setup for this customer.

        Payable window; shows the pathway to create a Miscellaneous Payable and a Manual Account Distribution.
      2. Enter a ‘Misc Payable’ for the amount required (Use an ‘dummy’ invoice # that ideally has some reference to this transaction – Example:  701444CONTRA
        • Enter an account distribution to the ‘Contra AR/AP’ account.
  4. Prepare check against this payable in the normal manner.
  5. Enter a customer payment against the credit invoice(s):
      1. Enter ‘Payment Received’ = zero.
      2. Right click on the applicable invoice row and click the ‘Add Adjustment’ button.

        Comsense Enterprise; shows the location of Customer Payment in the Navigation menu, the Invoice field, Payment Received field at 0, and the Invoice line item right-click menu.
      3. In the ‘Account’ field, choose the ‘Contra AR/AP’ account from the drop down list.
      4. Enter the invoice balance negative value in the ‘Adjustment’ amount field (When you tab form the field, you will see the ‘Invoice Balance’ amount in the line above change to zero.)
      5. Enter a reference in the notes field for the payable ID#.

        Customer Payment window; shows the adjustment line item with a negative adjustment value.
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