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Customer credit on a bill

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?

2 Comments
QuickBooks Team

Re: Customer credit on a bill

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.

 

Here's how:

  1. Click Accounting on the left panel.
  2. Select Chart of Accounts.
  3. Click New on the upper right-hand corner.
  4. Under Account Type, select Bank.
  5. Choose the Detail Type.
  6. Enter the name. You can use Clearing Account, Barter Account, or Wash Account.
  7. Click Save and Close.

You can now proceed with recording the barter transaction using the clearing account.

 

To receive the payment:

  1. Click the Plus icon.
  2. Under Customers, select Receive Payments.
  3. Choose the customer's name that you use for the vendor.
  4. From the Deposit To drop-down, select the Clearing Account that you created earlier.
  5. Put a check mark next to the appropriate invoice.
  6. In the Memo field, add information about the transaction.
  7. Click Save and close.

To pay the bill:

  1. Click the Plus icon.
  2. Under Vendors, select Pay Bills.
  3. In the Payment account drop-down, choose the Clearing Account.
  4. Put a check mark beside the vendor's bill.
  5. Click Save and close.

You can always get back to me if you have any further questions. Thanks for dropping by.

 

ProAdvisor

Re: Customer credit on a bill

Once all related the transactions are recorded, make sure it's zero balance in Clearing Account (bank account type).

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