How to record mutual payments of the invoices?

I recognize the unique circumstances of your non-profit membership organization and your mutual membership MoU arrangements, @Clio1616, and it's great to see organizations like yours collaborating. Consider me your partner in recording these mutual invoice payments in QuickBooks Online (QBO).

If both parties agree to the membership terms and benefits without cash exchange, recognizing equal-value services instead, we can create a clearing account for these non-monetary transactions. Then, enter the invoice and bills slightly differently than we normally would. I'll detail the steps below.

First, let's set up a clearing account as a bank account. This bank account will help balance the exchange of services or memberships without the need for actual cash transactions. Here's how:

1. Go to the Gear icon. Then, Chart of accounts.
2. Select New.
3. Enter an appropriate Account name like MoU Clearing Account.
4. Choose Cash and cash equivalents as the Account type, and Bank for the Detail type.
5. Leave everything else blank and hit Save.

Next, set up your other member both as a customer and a supplier. Since you can’t have the same name in both lists, make one of the names slightly different. For example, for the name Michelle Donovan, set it up as Michelle Donovan as a customer. Then, enter it as a supplier adding a middle initial: Michelle G. Donovan.

Once you have issued an invoice to the other member, create an invoice. Here's how:

1. Go to + New. Then, choose Invoice.
2. From the Customer dropdown, select the other member's name you set up as a customer.
3. Enter all the necessary information.
4. Select Save and Close.

Then, by the time you recognize the services and benefits provided to each other, record an invoice payment.

1. Click on +New. Then, select Receive payment.
2. From the Customer dropdown, pick the other member's name you set up as a customer.
3. Under Outstanding Transactions, find the details and info from the invoice created earlier and place a checkmark on it.
4. Fill in the date and amount.
5. Select the Payment method dropdown, then Add new.
6. Enter an appropriate name in the Name field to describe the nature of non-monetary payment, then click on Save.
7. Select the Deposit to dropdown, then select the clearing account (e.g., MoU Clearing Account) you've set up.
8. Hit Save and close.

We'll then need to create a bill after this. By creating a bill, we account for the value you received from the other member. This balances against the invoice you issued for the value you provided. You can follow these steps:

1. Select + New. Then, choose Bill.
2. From the Supplier dropdown, select the other member's name you set up as a supplier.
3. Enter all the necessary information.
4. Select Save.

Finally, we can close out the bill. Follow these steps:

1. Go to + New. Then, choose Pay bills.
2. From the Payment account dropdown, select the clearing account.
3. Place a checkmark for the earlier created bill.
4. Select Save and close.

That's it! Now you have a record of the exchange. Just a heads up, I also encourage collaborating with your accountant as you go through with the steps to ensure your books are accurate.

If the exchange of benefits or services isn't equal in value, the invoice or bill will show a balance due or credit. To help review these balances due or credit, you can run supplier or sales reports. I'm adding these articles as guides to help in this task:

• Run a report with supplier totals in QuickBooks Online
• Use reports to see your sales and inventory status in QuickBooks Online

If you have any further questions or need additional help, please don't hesitate to reach out. Your dedication to seamless operations is commendable, and we're here to support you every step of the way. Take care!