Customer is also Supplier

One option is to setup a bank type account in QB and call it by the customer/supplier's name, or "trades" or anything really.

Receive Payments (that you intend to apply to bills) from the customer then deposit them to the new bank account.

Pay Bills (mark only the supplier who is also your customer) then change the checking account at the bottom of the window to the new bank account.

One way is to NOT do this in the first place. It might make tracking more difficult for both of you.

Also see:

I don't do it that way, although it appears to save time and money on the surface. Right now you remember what happened. Two years form now, when you are trying to look up on something, the amounts entered into the search will not find the results you want.

Issue a cheque for the full amount and have your Vendor/Customer issue one for the full amount owed to you.

Costs an extra cheque, envelope and stamp but is much cleaner. Arno

Create a dummy account say 'Barter' under type bank. Go to receive payments select the customer and in the amount field put the amount that is to be adjusted against the supplier's bill. In the deposit to field select account 'Barter'. Now go to Pay bill window, select the vendor. Type the same amount in the 'Amt to pay column' and in the payment account field select 'Barter'. In this way the common amount is adjusted and the Barter account shows zero balance thereby not disturbing your balance sheet.

Mike Block - QuickBooks Tax Cut C.P.A. Intuit paid me to make QuickBooks better!

I suggest the same thing. Use slightly different names to distinguish the Vendor from the Customer and try to treat Bills and Invoices as if they were from or issued to two different entities.

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One trick I learned was to use a period at the end of one of the names. From a distance the vendor and customer look the same. I also treat the charges as a customer separate from those as a vendor. This provides a proper audit trail for these transactions. While it might be easier to just cut one check for the net amount you won't remember the details 2 years down the road.

If a predominantly customer is also selling a machine, I use the same name but small letters only and connect Vendor with an underscore. The same is done when a Vendor is buying, I then use the same Vendor name but with small letters and append Customer with an underscore. This makes for very easy checking on lists or Vendor/Customer Balance Detail reports.

To the OP, the "Addresses" are kept the same, of course. Arno

Stefan -

Consult your tax advisor when you see them for your annual returns (if you haven't already). I think most would suggest that you go through the motions of actually trading real checks and real invoices. It's a little more work but a little safer if audited.