A barter transaction occurs when you and your vendor exchange goods and services. To record the exchange, you would enter an invoice and a bill to record the products or services you are exchanging. You would fill these transactions out just like any normal invoice or bill.
The key will be to choose the barter bank account for the Deposit To: field when receiving payment and for the Payment Account: field when paying a bill.
To set up the barter bank account:
- Choose the Gear icon > Chart of Accounts.
- Create a new account:
- Click New, and select Bank for the Category Type.
- Select Cash on Hand for the Detail Type of bank account.
- You can call the account anything that you want.; you might try "Barter Bank Account."
- Click Save.
Before you begin to enter the barter transaction, make sure the barter partner's name is in both the vendor list and customer center. Since you can't have exactly the same name in both lists, make one of the names slightly different. For example, use John Smith as the customer name and John L. Smith for the vendor name.
To create an invoice for the barter transaction:
- Choose the Create (+) icon >Invoice.
- Fill out the invoice as you normally would.
- Choose + Then Receive Payment.
- Choose the barter customer in the Customer drop-down menu and fill in the date and amount as you normally would.
- In the Payment Method drop-down menu, select Add New, then enter "Barter" in the name field which appears in the pop-up window and then hit Save.
- Click Deposit To: and select the barter bank account created above.
Next, enter a bill for the barter transaction:
- Choose the Create (+) icon > Bill.
- Fill out the bill as you normally would.
- Choose + then Pay Bill.
- In the Payment Account drop-down menu, select the barter bank account created above.
- Put a check for that bill under the Pay column. Enter the amount then Save as you normally would.
Once the invoice is created and the bill is paid you will have a record of the exchange, but the barter bank account will be zeroed out.
If the exchange of goods was not equal in value keep in mind that the invoice or bill will show a balance due or credit. In that case, you'd need to either Pay One Vendor (if you owe the customer/vendor) or Receive Payment (if they owe you) to clear the balances owed.
Note: If your business operates on a cash basis, the invoice payment and the bill payment should both be dated with the same date as the invoice or the bill, whichever came last.
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