How do I use my supplier's bill (logged in QB as a bill) against the invoice I have for them in A/R?

Hello there, Catherine.

To clear the outstanding balance, we can record a barter transaction. A barter transaction happens when you and your supplier exchange goods or services instead of money.

First, let's set up a barter bank account. Here's how:

1. Go to the Gear icon and select Chart of Accounts.
2. Click New account.
3. Enter the account name. (ex. Barter Bank Account)
4. Choose Bank for the Account Type.
5. Select Cash on hand for the Detail Type.
6. Select Save and Close.

Next, record the payment for the invoice you issued:

1. Select + Create, then Receive payment.
2. Choose your supplier’s name from the Customer dropdown.
3. Set the Payment Date.
4. In the Payment method dropdown, click Add new.
5. Enter Barter in the Name field, then select Save.
6. From the Deposit to dropdown, select your barter bank account.
7. Tick the box of the invoice in the Outstanding Transactions
8. Click Save and close.

Now, let's pay the bill you've created:

1. Select + Create, then click Pay bills.
2. From the Payment account dropdown, select your barter bank account.
3. Select the box for the bill you’ve created.
4. Select Save and close.

Once completed, the exchange is recorded. If the value of the goods exchanged isn't equal, the invoice or bill will reflect a remaining balance or credit.

Let us know if you have any questions or need more help. We're here to assist.