Linda Artesani shows how to record a barter transaction in QuickBooks Online when a customer also becomes a vendor. Set up a dedicated Barter checking account, receive the invoice payment into it, then pay the vendor's bill from the same account so the net effect on the balance sheet is zero.
Chapters
Hi there. Linda Artesani, Artesani Bookkeeping. I just wanted to go over a transaction when you have a customer and the customer becomes your vendor. And the customer says to you, you know, I owe you $250 and you owe me $250. Let's just cancel the 2 items out. how do you record that? Because you want to record the sale because you did provide a service. You also want to record the bill that was generated by your vendor. So that's a transaction called bartering. Let's go to QuickBooks and I'm going to show you that here's my customer. I do his bookkeeping work for the month and his name is Joe Bananas and I've invoiced him $250. He in turn has repaired my Dell computer and has billed me $250 for the service of fixing my computer. So how am I going to pay the bill and record the payment of the invoice without really any money changing hands? So the way you record this transaction is you're going to come over into your chart of accounts and we're going to make a new bank account. And the new bank account is going to be called Barter. So it's just a bartering bank account. Just make it checking, save and close it. So I'm going to come back to my invoice and I'm going to receive the payment here. And I'm going to receive it to the Barter bank account, not my Bank of America bank account. I want to show it as coming in here. And I might want to make a note in the memo line to record barter transaction. Transaction. And then I'll hit Save and Close. But now I have to show that I've paid my bill, so I'm going to come back over to my vendor Joe Bananas here and come to this bill. I'm going to make a payment. Now I'm making the payment of $250 here, obviously no check number, but I'm going to come over here and make it to the Barter bank account. And so what's going to happen there is I'm receiving the money in and I'm paying the bank— I'm paying the bill at the same time. So if you come to— let's go to balance sheet and let's just run the balance sheet as of today. And I want to see this Bauer to bank account. Now you can see that I received the payment from my sale for my services for doing the bookkeeping, and I paid him the $250 and it makes it zero. So, if you had a transaction similar to this, but maybe Joe Bananas didn't charge me $250, maybe he only charged me $100 to fix my Dell, what you'll do here is you're going to only receive a partial payment on the invoice. You'll make 2 payments. He'll have to pay you the difference in the $250, so he'll owe you $150 on that transaction, and then you'll only record the $100 here. For what you are owed, and you'll show the $100 payment. So you'll always make sure this bank account is zero. So if it doesn't exactly match— this is the perfect scenario— but if it doesn't exactly match, you have to make this balance zero and then resolve the difference with your customer in, you know, with cash or money and use the other bank accounts. So that's really all you have to do in a barter bank account transaction. It's really simple and straightforward. If you have any questions or would like to see further transactions or even further videos about a specific topic, please reach out to me on Facebook. I'm pretty responsive there. Thank you for watching. Bye now.
