First, check to see if this account and payment item have already been set up in your QuickBooks® file.
Go to Lists, Chart of Accounts and look for an account named Barter Bank or Barter Exchange. Go to Lists, Customer & Vendor Profile Lists, Payment Method List and look for a method called Barter/Trade. If these are already on your lists, you can skip both Step 1 and Step 2.
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Step 1: Create a Clearing Account for tracking Barters
This is a one-time setup task.
- Go to the Lists menu and click Chart of Accounts
- Click Account at the bottom of the list and then click New
- Under Account Type choose Bank and then click Continue
- If you are using account numbers, enter the number in the Numbers field
- In the Account Name field, enter Barter Bank
- Click Save & Close
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Step 2: Create a Payment Method for Barters
This is also a one-time setup task.
- Go to the Lists menu and click Customer & Vendor Profile Lists and then click Payment Method List
- Click Payment Method at the bottom of the list and then click New
- In the Payment Method field, enter Barter/Trade
- In Payment Type, select Other
- Click OK
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Step 3: Pay the Vendor Bill
- In the Vendor Center, select Pay Bills
- Choose the Bill
- Change the Amount to Pay, if necessary, to the amount to barter
- At the bottom under Payment, choose Assign Check Number
- Under Account, select the Barter Bank account
- Choose Pay Selected Bill
- Under Check No. type the word "barter"
- Click OK
Note that you now have a negative balance in your Barter Bank account equal to the amount of the bill paid with barter dollars.
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Step 4: Receive the Customer Payment
- In the Customer Center, select Receive Payments
- Choose the Customer
- Enter the Amount to barter - the same amount as in Step 3
- Under Payment Method, choose Barter/Trade
- Select the Invoice to apply the payment to
- Click Save & Close
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Step 5: Record the Deposit
- In the Customer Center, select Record Deposits
- Select the payment to deposit and click OK
- Change the Deposit To bank account to the Barter Bank account
- Click Save & Close
Now your Barter Bank account should show a zero balance as the two transactions have washed.
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Properly recording barter transactions is essential to accurately representing your revenue and expenses. Treat barter income as you would any other business activity and remember to keep a paper trail.
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