Topic

Messages

Setting Up Trade Accounts

Does anyone have a good way to track Trade Accounts, both generally and within C&P?

Ann Marie Tullo Bookkeeper, Ph.D

Do you mean barter arrangements?

If so - we treat them just like all other jobs and purchases. For example:

We trade web maintenance & hosting for ad space with a magazine. I enter an A/R invoice for the work we do for the magazine. The magazine is the client. The work has a job number & I recognize it as revenue. Then I enter an A/P invoice for the services received. The magazine is the vendor. Then I clear the A/R through client payments, but the offsetting G/L code is not cash. It's a unique "clearing account code". Then I clear the A/P through vendor credits, and the offsetting G/L code is the same clearing account.

That way I've recorded the revenue (barter arrangements are subject to sales tax and income tax just like all other sales) as well as recorded the expense. I track everything through the clearing account.

Works for us. If you just think of it as "business as usual", just no cash is exchanged it's easy.

Roxanne Cowan

Where on you balance sheet is the clearing account? Asset or Liability?

Ann Marie Tullo

We set up our trade accounts as current asset accounts.

Arlene Mowles

When you print a statement for that client, does it keep a running total. For example: the vendor (the magazine in this case) bill you 600.00, then you trade servicess in theamt.t. of 400.00willl printing a client statement show that the client has a 200.00 credit? If not how or where can you keep a running total?

Tamera Lyn Sullivan