How do I handle this workflow?

Question

I provide various services to a customer 5 days per week. This customer is also a vendor because in addition to paying me for services I provide, they also charge me various expenses that get deducted from the amount they pay me.

this customer/vendor pays me daily after I finish working that day.

Each daily payment I receive from my customer/vendor is the total NET amount I’m owed after calculating the total revenue from multiple income categories, MINUS expenses deducted for multiple expense categories.

by the end of my work week I will have received payment for all NET income I’m owed for services provided.

the following week, I receive an itemized statement from my customer outlining a detailed list of how much money I earned for each service category I provided and how much was deducted for each expense category. To be clear, the information on this statement is reflective of the PREVIOUS work week, and I don’t know the breakdown of which income and expense categories I need to organize the payments into until AFTER I receive the payments. The complication for me seems to be the fact that I receive payments for services rendered before I know what income/expense accounts the payments need to be organized into.

so my questions are as follows…

How should I handle the workflow of these transactions in QBO?

How should I record receiving the payments throughout the work week in QBO? Should I use credit memos, then apply those credits later after I get the statement from my customer/vendor the following week?

when I receive the itemized statement the following week, do I then create invoices and bills to do the categorizing?

At what point in the workflow do I match the payments to the correct transactions in the bank feed?

I essentially need to know, from beginning to end, the correct way to record all these transactions based on the fact that I receive payment before I’m able to categorize the transactions correctly.

Thanks for your help!

ChristineJoieR · Answer

Hello there, schievenin. Let me show you how to create a barter.

A barter transaction occurs when you and your vendor exchange goods and services. To document this exchange, you would create an invoice and a bill to account for the products or services being exchanged. Here's the process for doing so.

First, you need to Set up the barter bank account

Go to Settings ⚙ then select Chart of Accounts.
Select New to create a new account.
Under the Account Type ▼ dropdown, select Bank.
Under the Detail Type ▼ dropdown, select Cash on hand.
Enter the account name. (ex. Barter Bank Account)
Select Save and Close.

Next, you need to create an invoice and receive payment.

Before recording your barter transaction, ensure that you have added your barter partner as a vendor (for the bill) and a customer (for the invoice). As you cannot have the same name in both lists, consider making one of the names slightly different. If your business follows a cash basis, it's important that the payment dates on the invoice and bill match and are dated with the same date as the invoice or bill.

Here's how:

Select + New.
Select Invoice.
Select your vendor’s (barter partner) name from the Customer dropdown.
Enter all the necessary information.
Select Save and Close.

Receive payment for the invoice

Select + New.
Select Receive payment.
Select your vendor’s (barter partner) name from the Customer dropdown.
Note: The details and info from the invoice you created earlier will appear under Outstanding Transactions.
Fill in the date and amount.
Select the Payment method ▼ dropdown, then Add new.
Enter “Barter” in the Name field, then select Save.
Select the Deposit ▼ dropdown, then select your barter bank account.
Select Save and Close.

Finally, generate a bill, choose the barter partner, and settle the bill by using the barter account as the payment account.

You have now entered the exchange. If the value of the goods exchanged is not equal, the invoice or bill will display either a remaining balance or a credit. Let me know if you have additional concerns.

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