How to Offset Customer Invoices and Supplier Bills (Contra Entry) in Metro ERP?
In Metro ERP, when a company has both payable (Supplier Bills) and receivable (Customer Invoices) for the same partner, a Contra Entry (offset) can be used to settle both amounts instead of making separate payments.
Introduction
Sometimes, a company has a customer who is also a supplier. Instead of making separate payments, businesses can offset the amounts using a contra entry. This guide explains the full process step-by-step in Metro ERP.
Step 1: Create a Customer Invoice
1) Go to Accounting > Customers > Invoices.
2) Create an invoice, click on the 'Create' button. Fill in the required details, including Customer, Invoice Date, Product, Quantity, and Unit Price. Once all details are entered, click 'Save' and 'Confirm' to validate the invoice
Step 2: Create a Supplier Bill
3) Go to Accounting > Vendors > Bills.
4) Create a bill, click on the 'Create' button. Fill in the required details, including Vendor, Bill Date, Product, Quantity, and Unit Price. Once all details are entered, click 'Confirm' to validate the bill.
Step 3: Create a Contra Journal Entry
Since ABC PTE LTD owes you $5,000, and you owe them $4,000, we offset the amounts.
5) Go to Accounting > Accounting > Journal Entries.
6) Click on the 'Create' button and fill in the details such as Date and Reference. In the journal entry lines, enter the following:
First Line (for a supplier bill):
Account: Accounts Payable
Partner: Select the vendor
Debit Amount: Enter the bill amount
Second Line (for a customer invoice):
Account: Accounts Receivable
Partner: Select the same vendor/customer
Once all details are entered, click 'Post' to finalize the entry.
Step 4: Register Payment & Reconcile
7) Go to Accounting > Customers > Invoices.
8) Open the invoice for ABC PTE LTD and add the outstanding credits from the Contra Entry for ABC PTE LTD. After adding this, the invoice will be marked as partially paid.
Step 5: Adjust the Remaining Balance (If Any)
Since the invoice amount was $5,000 and the bill was $4,000, ABC PTE LTD still owes $1,000.
8) Click on the 'Register Payment' button to enter the remaining amount, then validate the payment.
9) For the Supplier Bill, go to Accounting > Vendors > Bills. Open the bill for ABC PTE LTD and add the outstanding debits from the Contra Entry for ABC PTE LTD. After adding this, the bill will be marked as fully paid.
By following this guide, businesses can easily handle contra entries in Metro ERP, ensuring accurate financial records and reducing unnecessary cash movements.
To get more details how to offset customer invoices and supplier bills (Contra Entry) in MetroERP Accounting System, please do contact us at support@metrogroup.solutions