The MacGyver-esque Way to Handle Barter in QuickBooks Online.” It focused on how to deal with customers who were also vendors and what to do to apply receivables and payables against each other.
This eliminated the need to send full payments back and forth so that the business would deal only with receiving the net receivable or paying the net payable.
However, this is not the only barter scenario that businesses encounter. Your customers are not always your vendors and vice versa, but you might still engage in barter.
Barter exchanges have become popular in the age of e-commerce and social media, even for businesses. In fact, if your business is bartering with several other businesses, a barter exchange is the way to go in order to keep track of the transactions and balances, much like a bank account. And also, similar to a bank account, barter exchanges charge fees that must be tracked as well.
So how do we track barter exchange transactions and balances in QuickBooks?
Remember that barter is just another form of payment, so the best way to track it is to set up each barter network used as a separate bank type of account. And this method works in either QuickBooks Desktop or Online (but I’m using QBO to illustrate it).
Any time sales are made to a customer via this barter exchange (either by receiving a payment on an invoice or by a sales receipt), the “funds” are deposited into this barter account.
Any time that purchases from other exchange members are made via this barter exchange, use the barter bank account as the payment account (whether on a check, expense, or bill payment).
The fees that are charged by the barter exchange, similar to bank fees, should be entered against that same barter bank account. This can be done in many ways but my preferred way of entering those transactions is via an expense. They can be booked to Bank Service Charges (or, if you prefer, to a new Barter Exchange Fees account).
Then the barter account can be reconciled against the statement, similar to how bank and credit card accounts are reconciled. The main difference here is that barter accounts cannot be connected to the bank feeds, so all the transactions must be entered manually (unless any transactions, such as fixed monthly fees, are eligible to be made recurring).
Why is tracking barter important? Aside from the benefit of keeping complete and accurate records, you won’t lose track of barter “money” you have banked to spend on goods and services. In addition, the barter exchange produces a 1099-B for the value of all income your business has received from those barter transactions during the year. So it’s necessary to track the expenses related to barter transactions to offset that income.