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Experienced Member

Can I pay a contractor with business credit?

I have a hired labor contractor that I regularly use. I had been paying him with checks but has now asked if I can pay him by purchasing certain items my business sells with my business account. Is this at all possible, and if so, how? Basically, it would be like a revolving line of credit fro him from my business. 

1 Comment

Re: Can I pay a contractor with business credit?

Thanks for dropping by the Community, fullspectrum307.


I can help in paying your vendor using the items you sell in your business.


QuickBooks Online has a way to record a barter transaction which 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.


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.


First, let's set up the barter bank account:

  1. Choose Accounting on the left pane, then select Chart of Accounts.
  2. Under Account Type, choose Bank.
  3. Select Cash on hand under Detail Type.
  4. Enter a name and click Save and Close.

Next, create and enter an invoice:

  1. Choose the Plus sign icon and select Invoice.
  2. Enter the needed details and click Save.
  3. Click Make Payment at the top.
  4. Under Payment Method, click Add New.
  5. Enter Barter and click Save.
  6. Under Deposit To, select the Barter Account you've created above.
  7. Click Save and close.

Lastly, enter and pay the bill for barter transaction:

  1. Click the Plus sign icon and choose Bill.
  2. Enter the needed details and click Save.
  3. Click Make Payment.
  4. Under Payment Method, choose the barter account created above.
  5. Put a check for that bill under the Pay column.
  6. Enter the amount then Save.

The screenshots below show these steps as well.




For the detailed steps, check out this article: How to record a barter transaction.


That information should get you on the right track. I'd be delighted to answer other questions should you have any. I'm cheering you to continued prosperity.