Porte Brown Wealth Management
Swapping Goods and Services -- Rather than Cash
Ask one of your vendors if they would like to swap or barter goods or services as payment for work and you may get a quick reply of "yes." Many people would love to trade services rather than exchange payments. That's fine but it is important to properly record the details in QuickBooks and in your financials.
Here are the steps to follow:
1. Set up a "Clearing" bank account. This account will not have a balance, but allows you to easily offset outstanding payables and receivables with the same company or individual.
2. Record outstanding payables and receivables as usual. You will be required to enter the company or individual in both the customer and vendor list. Simply differentiate the name in the list by at least one letter. For example, enter the customer with "-c" at the end of the name in the customer list. Enter the vendor with a "-v" at the end of the name in the vendor list.
3. Pay the desired outstanding bills for a particular vendor, but choose Check as the payment method and select the "Clearing" bank account rather than the actual checking account. Choose Assign check no. and enter Trade as the check number.
Note: If the "vendor" balance is larger than the "customer" balance, pay only the amount of the customer balance.
4. Enter a customer payment for the same amount for the corresponding company or individual. Choose to deposit the money directly to the "Clearing" bank account rather than the actual checking account.
When you are done, the balance in the "Clearing" bank account should be zero. Also, your payables and receivables will be maintained with accurate, up-to-date balances.
There may be tax implications regarding customer and vendor trade. If you would like, contact us to discuss these issues.
Questions? Let us know how we can help.
We Help You Get to Your Next Level™
Get in touch today and find out how we can help you meet your objectives.
PORTE BROWN SITE
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.