I have a Vendor that we buy material from, but they are also a Customer and buy material from us.

challen · ‎November 19, 2020

I have Vendors that we buy material from, but they are also a Customer and buy material from us. I need to apply the money that they would owe us as a credit against the bills that we owe them. Is there a way that I can do that just from the Vendor side of things, or would I have to keep them separated on the Customer and Vendor side of things for everything to balance right? I guess I need to know if I have to create an invoice for their purchases or if I can use like the vendor credit option to do this.

Jessica_young · ‎November 19, 2020

Good morning, @challen.

We'll be conducting a barter transaction in this case! This happens when you and your vendor exchange goods and services. To record the exchange, you’d enter an invoice and a bill to record the products or services you’re exchanging. Here’s how:

Go to Settings ⚙ then select Chart of Accounts.
Select New to create a new account.
Under the Account Type ▼ drop-down, select Bank.
Under the Detail Type ▼ drop-down, select Cash on hand.
Enter the account name. (ex. Barter Bank Account)
Select Save and Close

Then we'll create an invoice and receive payment on this invoice. For more detailed instructions on creating and receiving payment on invoices, check out this article: Create invoices in QuickBooks Online.

Lastly, we'll want to create and pay a bill to record the second part of this transaction.

To create a bill:

Select + New.
Select Bill.
From the Vendor ▼ drop-down, select your barter partner.
Enter all the necessary information.
Select Save.

And then, to pay the bill:

Select + New.
Select Pay Bills.
From the Payment account ▼ drop-down, select your barter bank account.
Select the bill you’ve created earlier.
Select Make payment under Balance Due.
Enter the amount.
Select Save and close.

You now have a record of the exchange. If the exchange of goods isn’t equal in value, the invoice or bill will show a balance due or credit. If you would like to read about this process in full detail, you'll find this article helpful: Record a barter transaction.

If you have any other questions, or I can be of more assistance, please reach back out! Have a great rest of your morning.

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Jessica_young · ‎November 19, 2020

Good morning, @challen.

We'll be conducting a barter transaction in this case! This happens when you and your vendor exchange goods and services. To record the exchange, you’d enter an invoice and a bill to record the products or services you’re exchanging. Here’s how:

Go to Settings ⚙ then select Chart of Accounts.
Select New to create a new account.
Under the Account Type ▼ drop-down, select Bank.
Under the Detail Type ▼ drop-down, select Cash on hand.
Enter the account name. (ex. Barter Bank Account)
Select Save and Close

Then we'll create an invoice and receive payment on this invoice. For more detailed instructions on creating and receiving payment on invoices, check out this article: Create invoices in QuickBooks Online.

Lastly, we'll want to create and pay a bill to record the second part of this transaction.

To create a bill:

Select + New.
Select Bill.
From the Vendor ▼ drop-down, select your barter partner.
Enter all the necessary information.
Select Save.

And then, to pay the bill:

Select + New.
Select Pay Bills.
From the Payment account ▼ drop-down, select your barter bank account.
Select the bill you’ve created earlier.
Select Make payment under Balance Due.
Enter the amount.
Select Save and close.

You now have a record of the exchange. If the exchange of goods isn’t equal in value, the invoice or bill will show a balance due or credit. If you would like to read about this process in full detail, you'll find this article helpful: Record a barter transaction.

If you have any other questions, or I can be of more assistance, please reach back out! Have a great rest of your morning.

ConstructionGal_OfficeManager · ‎April 05, 2022

Follow up question to this. I have a vendor who purchased material from us that we had purchased for a customer job in excess. I want to show this payment for materials from the vendor on reports for the job.

ConstructionGal_OfficeManager · ‎April 05, 2022

Spin off question from this one. Which this is great information! We have a similar situation except we don't have a bill to apply a payment to. A vendor purchased material we had purchased extra from a job we were working. We wanted to apply the payment from the vendor to the specific job we got the material from to show it on our reports. Is the best way for doing this is to create a customer profile for the vendor and then link the two customers together within the transaction detail report?

TirzahC · ‎April 05, 2022

Hello there, ConstructionGal_OfficeManager.

Every business has a different structure, and it also goes the same way with recording data. Based on the information provided, I agree with you that we'll need to create customer profile to make billable expense otherwise you can create expense or Check instead of bill if needed.

Aside from that, you'll want to use a barter account to be able to offset their payment. A barter transaction happens when you and your customer exchange goods and services. To record the exchange, you need to enter an invoice and a bill to record the products or services you’re exchanging.

Before doing so, please make sure you've added your barter partner as a vendor (for the bill) and customer (for the invoice). Since you can’t have the same name in both lists, make one of the names slightly different.

To give you complete details about this process and on what are the steps to take, please see this link: How to Record a Barter Transaction?

Also, to further guide you in managing your customers and suppliers as well as their transactions in QBO, I would encourage you to check out this article: QuickBooks Help Articles.

Let me know if you have other questions or need clarification about this topic, mention me or add a new comment below. I'm more than glad to share additional insights about QuickBooks and help any time. Have a wonderful day!

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I have a Vendor that we buy material from, but they are also a Customer and buy material from us.