Customer also vendor.. How treats a/c?

[isolator]

Dears,

We have one customer, and we sub-contracting some projects for them. They are a Aircondition units sales company also. So some times we are purchasing some materials & equipments from them for credit. They are adjusting the value for this purchases from our sub-contracting agreement price, or some times we paying it after a short period.

How this customer (also vendor) a/c treats in PT. Please give me enough advice..

Regards,
Isolator,,

[Lisa_p]

I would set them up as a vendor and as a customer. Enter the purchases you make from him normally and enter the invoices that they owe you normally.

Then set up a cash type account called "cash clearing" or "barter account" or something similar. Use that account to "pay" the offsetting transactions.

For example - you make purchases for $5,000 and you sell services for $3,000.

Do a receipt of $3,000 for your invoice to this clearing account

Then make a payment to the vendor for $3,000 from the same account. Now it will show that you owe $2,000 which you can pay with real money.

[LauraG]

Some folks also just keep the transactions separate. Checks are issued as you normally do instead of using a Clearing account. This keeps the monies straight and a full audit trail exists.