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Level 1

Better Understanding of Barter Account

I'm trying to better understand how to fully process a transaction using a barter account. My company offers education courses and I contract instructors to teach some of them. Let's say that each customer pays my company $1000 for the training and I have a course with 4 customers ($4000 tuition paid). Rather than pay the instructor a set amount, our arrangement is they receive the tuition less costs paid by my company and a fee paid to my company. For example, let's say that my company rented the facility for $1000, there are $500 worth of materials provided to the students, and my company receives a fee of $100 per customer ($400 total in this case).


I create an invoice for the Instructor (under the Customer) for $1000+$500+$400 for a total of $1900 and receive payment from a barter account.


I create a bill for the Instructor (under the Vendor) for $1000 * 4 for a total of $4000 and pay the bill from the barter account.


My barter account now has a balance of $1900. How do I reconcile that with the payments received from the customers in my actual bank account?

3 Comments 3
QuickBooks Team

Better Understanding of Barter Account

I'm here to help you reconcile the payments received in your actual bank account, @Tim104.


First, you'll have to transfer the barter balance to your actual bank account so that you'll able to include that amount in the reconciliation. I'll guide you how.


  1. Select + New.
  2. Under Other, select Transfer.
  3. From the Transfer Funds From drop-down list, select the barter bank account that the funds are coming out of.
  4. From the Transfer Funds To drop-down list, select the actual bank account the funds are being deposited into.
  5. In the Transfer Amount field, enter the amount being transferred.
  6. Edit the Date.
  7. (Optional) Enter a description of the transfer in the Memo field.
  8. Select Save and close.


From there, you can start reconciling your actual bank account.

  1. Select the Gear ⚙ icon and then select Reconcile. If you're reconciling for the first time, select Get Started first, and then Let's do it.
  2. From the Account ▼ dropdown menu, select the account you want to reconcile. Make sure it's the same one on your statement.
  3. Important: If you see a message about issues with a previous reconciliation, select We can help you fix it. You'll need to fix these issues before you start.
  4. Check the Last statement ending date. Make sure your bank statement starts the day after your last reconciliation.
  5. Review the Beginning balance. Make sure the beginning balance in QuickBooks matches the one on your bank statement. Here’s what to do if they don't match.
  6. Enter the Ending balance and Ending date as they're written on your bank statement. Some banks call the ending balance a "new balance."
  7. When you're ready to start, select Start reconciling.


Once done, you can run the Reconciliation Report that summarizes that beginning and ending balances. It also lists which transactions were cleared and which were left uncleared when you reconciled.


Here's how:

  1. Go to Reports.
  2. Type Reconciliation Report in the Find report by name search bar.
  3. Select Reconciliation Reports.
  4. Select the Account for the reconciliation report you want to view.
  5. From the Report period drop-down arrow, choose the reconcile period.
  6. Select View Report.


Please let me know if you have any other questions or concerns. I'll be around to help. Have a good one.

Level 1

Better Understanding of Barter Account

Thank you!


Before I do that, I want to make sure I am doing it properly. Will this allow me to match it to the payment received from the customer or will this double that amount in the bank account?


Or I am approaching the entire scenario wrong? To recap: customer pays me. I pay upfront costs that the instructor is responsible for, so I create an invoice (that gets handles through a barter transaction) to account for those and the fee the instructor pays me. I create a bill for the FULL amount the customers paid me (to reconcile the barter transaction), and I then ACTUALLY pay the instructor the net amount. I create a transfer to zero the balance in the barter account.

QuickBooks Team

Better Understanding of Barter Account

Thanks for adding more details about your concern, @Tim104.


The recommended steps shared by my colleague are how to properly record and match your payment transactions. This process, won't double the amount in your bank account.


For additional reference, let me share this article to guide you in transferring funds between accounts. We also have a page that covers all tasks you can do when handling A/R transactions, please check this link.


If you have other questions or concerns, don't hesitate to comment below. I'm more than happy to answer them for you. Have a lovely weekend. 

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