Customer is a Vendor
If you have a contact who is both a customer and a vendor, you can keep an accurate record of the receivables and payables. You can make a vendor "payment" and receive a customer "payment" using a detail checking account created just for these transactions.
For Example: ABC Company buys $100 worth of merchandise from you, so you record an invoice for $100. The next day, you purchase $20 worth of services from ABC, so you record a purchase order for $20. For the sake of convenience, you don't pay ABC the $20; instead, you reduce their balance with you to $80.
Here's how to make it work:
- Create two separate cards for the contact; one customer card and one vendor card.
- Record the sale with the customer card and the purchase with the vendor card, as usual.
- Create a new detail checking account (Asset type bank) just for these transactions. To create a new asset, type bank account: (a) Choose Accounts List in the Accounts Command Center, (b) Click the Asset tab, and then click the New button, (c) In the Edit Accounts window, choose Detail Account, (d) Indicate type bank, (e) Enter a name and number for the account, (f) Click OK.
- Click the Pay Bills button in the Purchases Command Center.
- Choose the checking account created just for these transactions from the list in the upper left corner of the Pay Bills window. Select the Vendor and the bill. And record the payment (in our example, it's $20).
- Click the Receive Payments button in the Sales Command Center.
- Choose the checking account created just for these transactions from the list in the upper left corner of the Receive Payments window. Choose the customer and the invoice, and indicate a payment of $20 (for our example). Click Record.
The end result: The purchase is fully paid, and the invoice is reduced to an $80 balance.
Note: Since the same amount is recorded to the checking account as a vendor payment (credit) and as a customer payment (debit), the checking account should always have a zero balance.
For more information on reporting income, purchases, and sales taxes using a barter system, check the IRS Barter web site.