Matching customer bills and sales

Matching customer bills and sales

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I have a statement from a seller (Amazon) that shows a summary of the months sales, expenses and then how much they have paid into my bank account. On my accounts package, I have entered the expenses under Bills, I put the sales as a Sales invoice. So, for that customer (Amazon), they owe me money for sales, I owe them for bills and they pay me the difference.

How do I match these items together in my accounts package? Is it using credit notes or something? I need to show the bills as paid, the sales invoices received. Hope that makes sense.

Thanks,

Jon

Replies (7)

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By mrme89
02nd Apr 2015 12:51

You already received the answer on UKBF.
 I don't understand why you need further answers.

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By Jon12345
02nd Apr 2015 14:15

Different perspectives. The

I received one answer, but why can I not seek out alternatives? Different perspectives? The suggestion was to set Amazon up as a bank account. That doesn't seem quite right to me. I understand how it can work, but I would like to know of an alternative way. Amazon isn't a bank account. They are both a seller and supplier.

I wondered if there was a recommended method the accounting profession typically uses in these circumstances.

I am using Xero, if that makes any difference.

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By johngroganjga
02nd Apr 2015 14:28

Contra

The classic method is to use a contra. 

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By Jon12345
02nd Apr 2015 14:44

Thank you johngroganjga. In

Thank you johngroganjga. Just mentioning the term "contra" has helped massively as Googeling it has led me to some good resources.

In practice, would you use the contra account or set Amazon up as a  bank account?

 

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By johngroganjga
02nd Apr 2015 14:45

A contra is not an account it's a type of accounting entry. In particular it's a debit in the purchase ledger account and a credit in the sales ledger account of the same customer / supplier.

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By neileg
02nd Apr 2015 15:46

Pragmatic

Both pieces of advice are correct. Occasional invoice offsets would suggest using contra entries which can be implemented using dummy credit notes. If these are frequent, then setting Amazon as a bank account is probably better if you are using Sage because that is the only type of account that will happily deal with debist and credits to match your invoices. If you have a different accounting package then the advice may be differenet but you haven't shared that with us.

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By Jon12345
02nd Apr 2015 17:39

I got a solution now due to the word contra! I did a search and Xero suggests using their "Suspense" account. You do contra entries for Sales and Bills and it acts like a temporary bank account. All good!

Thanks for everybodies help.

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