I have a vendor who gives me a bill, but deducts from the bill the cost of what he buys from me.
How do I account for that so that inventory stays correct and I'm paying the bill for the correct amount?
You can record this as a barter transaction, itsbonnie.
This kind of transaction is used when you sell products to a person or company from whom you buy other items. Let's create a clearing account first before we receive the payment and pay the bill.
You can now proceed with recording the barter transaction using the clearing account.
To receive the payment:
To pay the bill:
You can always get back to me if you have any further questions. Thanks for dropping by.
Once all related the transactions are recorded, make sure it's zero balance in Clearing Account (bank account type).