Recording of Barter Exchanges in QuickBooks
Barter transactions, where customers are also vendors, require careful recording to maintain accurate financial records. Follow these steps to properly record a barter exchange in QuickBooks:
- Invoice the Customer
✅ Invoice the customer as you normally would for the goods or services provided. - Record the Barter Payment
✅ Go to Customers: Receive Payment.
✅ Enter the Payment Amount (the amount of the invoice you received from your vendor).
✅ Set Pmt. Method to Barter.
✅ Select the radio button for “Group with other undeposited funds“.
✅ Save this transaction. - Deposit the Barter Payment
✅ Go to Banking: Make Deposits.
✅ Select the barter payment from the Payments to Deposit screen.
✅ Hit OK to proceed to the Make Deposits screen. - Create a Zero Deposit
✅ In the Make Deposits screen, enter a negative deposit entry for the barter amount as follows:- Deposit To: Select your normal operating checking account.
- Date: Use the date you would have normally paid the vendor’s invoice.
- Memo: Change from “Deposit” to Barter.
- Enter Details for the Negative Deposit Entry
- ✅ Received From: Enter the vendor’s name if the invoice is recorded as a bill.
- ✅ From Account: Choose Accounts Payable if you’ve entered the vendor’s invoice as a bill. Otherwise, select the appropriate expense account for the vendor’s invoice.
- ✅ Memo: Note the vendor’s invoice number.
- ✅ Amount: Enter the vendor’s invoice amount as a negative value to offset the deposit. This will result in a “Zero” deposit transaction.
- Save the Transaction
✅ Save the deposit entry. This zero deposit ensures that both the invoice and the bill are settled without affecting the cash balance.
❌ Avoid Common Mistakes
- Do not use the “Write Checks” window for barter payments. This method may not accurately reflect the payments in your records.
Following these steps ensures that your barter transactions are accurately recorded, keeping your financial statements balanced and correct!