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Customers Pay Bills Receive Payment Vendor Vendors

I have a vendor that I purchase from and who also purchases from me. How do I handle this barter transactions in QB online?

A barter transaction is one in which you buy products and services to a person (vendor) or company from whom you also sell other products and services (customer).

Set up the bartering process in QBO:

  1. Open your vendor center and add the vendor to your vendor information screen with a “(V)” after the name.
    From the home page screen > left blue navigation bar > Vendors > New vendor (upper right corner) > Fill out vendor information > Example: Barter Enterprises (V)
  2. Open your customer center and add the customer to your customer information screen with a “(C)” after the name.
    From the home page screen > left blue navigation bar > Customers > New customer (upper right corner) > Fill out customer information > Example: Barter Enterprises (C)
  3. Set up a new bank account for your barter transactions.
    From the home page screen > left blue navigation bar > Transactions > Chart of Accounts > New > Category Type = Bank > Detail Type = Cash on hand (or select one) > Name = Barter Clearing > Description = Bank Clearing – Same Vendor and Customer

Check out our helpful YouTube tutorial video. Be sure to subscribe our channel. Follow us on Twitter (@newqbo). We highly encourage you to watch the entire video.. You do not want to miss a step!

 
vendor

customer

barter bank

Enter Bills and Invoices:
Enter Bills and Invoices as normally would. No difference. Make sure to select Vendor (V) on bills and the Customer (C) on invoices.
For entering Bill > From the home page screen > create + sign > vendors > bill
For entering Invoice > From the home page screen > create + sign > customers > invoice

create vendor bill

create customer invoice

 

Barter Settlement

Make payment due (money out) to the Vendor (V)
Case # 1:
Vendor Bill = $600.00
Customer Invoice = $500
Balance due to Vendor (V) = $100

Pay Bills and Receive payment

  1. To Pay Bills (partial $500) > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Barter Clearing (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = Same amount as Customer Invoice (example: $500)
    Starting Check No. = Non Cash Payment
  2. To Receive Payment > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Non Cash (add new if needed)
    Reference = Barter
    Deposit to = Barter Clearing (IMPORTANT)
    Select Outstanding Invoice transaction
    Amount = $500
  3. To Pay Bills (remaining $100) > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Bank Account (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = $100
    Starting Check No. = Non Cash Payment

vendor payment offset against customer invoice

customer payment applied against vendor bill

balance due payment to vendor

vendor page

customer

Review Bank Register for Barter Clearing account (from the home page screen > left blue navigation bar > transactions > chart of accounts > view register under action column
This account should have zero balance.

bank register

 

Receive payment due (money in) from the Customer (C)
Case # 2:
Customer Invoice = $2,000
Vendor Bill = $800.00
Balance due from Customer (C) = $1,200

Receive payment and Pay Bills

  1. To Receive Payment > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Non Cash (add new if needed)
    Reference = Barter
    Deposit to = Barter Clearing (IMPORTANT)
    Select Outstanding Invoice transaction
    Amount = $800 (partial)
  2. To Pay Bills > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Barter Clearing (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = $800 (same as vendor bill)
    Starting Check No. = Non Cash Payment
  3. To Receive Payment ($1,200 by check) > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Check
    Reference = Customer (C) check number
    Deposit to = Bank Account (IMPORTANT)
    Amount = $1,200

2 create customer invoice

2 enter bill

2 received payment offset by vendor bill

2 vendor bill payment

2 recevied payment by check

2 customer page

2 vendor page

Review Bank Register for Barter Clearing account (from the home page screen > left blue navigation bar > transactions > chart of accounts > view register under action column
This account should have zero balance.

2 bank register

 
Note: It can also make this barter process to work even if the customer and vendor are different, but need to settle out A/R and A/P balances.

 

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