Items in place of cash

Hello, so I run a dog walking business and I have just started to sell dog food, one of my customers is building me a website, last week I gave her some dog food and I raised an invoice, she was due to pay me this week, but we have agreed that she only wants the dog food as payment, so I have agreed to give her the dog food, but the invoice is still sitting on my QuickFile, I’ve obviously paid for the food, should I just delete the invoice or should I mark it as paid in some respect to show it’s been given to her as payment for the website, she can’t give me an invoice as she is doing it outside of her normal job

I hope you understand what I am trying to say

If you want stock control of the product that you are selling then better to record the sale. So you have an outstanding Sales Invoice for providing dog food, but also there is an outstanding Purchase Invoice for the website that she is building for you. So you have two invoices at the price, but one in Sales and the other in Purchases.

To pay such invoices I have a bank account in Equity Accounts called “Gifts & Samples receipted”. The two invoices can be paid through this bank account to complete the transaction between the two of you.

Of course sometimes you would also like to record receipt/sending of a gift from/to someone where there is not that reciprocal arrangement, these could be paid off through this bank account. At the end of the year a bank transfer is created to the “Proprietor Drawings Account” so the account is zeroed each year, but also by keeping such transactions seperate they are easily identifiable.

Hi, I sort of understand points you have made but there is no and will not be a purchase invoice for the website, she works for a web design company but she is building it outside of her job and only wants dog food as payment.

I have tagged the purchase of the dog food as I would normally do, but the sales invoice is still there, I don’t fully understand the bit about gifts and samples bank account

Hi @rawandmoreshack

The only way to remove the invoice would be to either delete it or raise a credit note against it. You could in turn put a note on the credit note explaining the reasoning.

What you may also want to do is move the balance of the stock (the dog food) to another nominal such as 6202 Gifts and Samples, similar to this:

It’s worth noting that without them giving you an invoice it will show as an expense on your accounts.

However, I’m not an accountant, so I recommend double-checking with one to be sure.

Hope this helps.

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