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Experienced Member

Invoice payments received as a vendor credit

I have a service business and due to warranty work, several of my customers are also vendors.

I invoice them for the labor and parts when I repair their equipment (customer - AR).

I also buy the parts from them and enter their invoice as bill (as a vendor - AP).

They require me to pay those bills within 30 days (which I always do) and that zeros the balance owed.

Here's the rub - they pay my invoice (usually 60 days later) in the form of a vendor credit. I'm left with a positive balance on the AR side and negative (credit) balance on the AP side.

What I'm currently doing is not posting the vendor credit but rather requesting a check for the amount of the credit. When it arrives I receive it as payment towards the invoice on the customer side. 

Is there an easier (or more correct) way to do this? 

1 Comment
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Moderator

Re: Invoice payments received as a vendor credit

Hi there, samiam1,

 

I appreciate you reaching out to the Community and providing detailed information. I can help share information about recording customers credit card as payment to the vendor.

 

In your case, you can record a barter transaction. You can use this transaction when you and your vendor exchange goods and services. To be able to record the exchange, you'll need to enter an invoice and bill, then set up barter bank account.

 

To set up barter bank account, here's what you'll need to do:

  1. Go to Lists menu at the top, then select Chart of Accounts.
  2. Select New in the Chart of Accounts page.
  3. In the Add New Account window, select the Bank radio button.
  4. Click Continue.
  5. In the Account Name field, enter Clearing Account, Barter Account or Wash Account.
  6. Do NOT enter an opening balance.
  7. Click Save & Close.

Once done, create and receive payment for the invoice for the barter transaction. Then, enter and pay the bill for the barter transaction.

 

For additional information, here's a great resource that you can check:

As always, you can contact our QuickBooks Support team if you need assistance with the steps. They'll be able to pull up your account in a secure environment and help you navigate using one of their tools like screen sharing.

 

In case you need tips and related articles in the future, visit our QuickBooks Community help website for reference: QBDT Self-help.

 

That should do it! Feel free to click the Reply button below if you have follow up questions with the above process. I'm always here to answer it for you.