Many small business owners do not understand that barter currency is recognized by the Internal Revenue Service. Many also do not realize that they are required to report all barter income, whether it is earned through a barter exchange or through a one-off barter deal; but that’s another post. Today I want to share with you how organized barter can help to strengthen your business.

Choosing to accept barter currency will give you opportunities to do business that you otherwise would not have had because those in barter networks typically do not spend outside of the networks if they do not have to. Your goal should be to treat these customers just like any other (non-barter) customers because this will lead to referrals and most of those referrals will be non-barter referrals. By taking on barter customers, you can grow your non-barter (cash) business as well.

Once you decide to join a trusted barter network, you also need to monitor what percentage of your business coming in as being transacted in barter currency because every business still needs cash to run. As you learn how to leverage barter, you will be able to use it to offset many business expenses, even paying contractors and employees! This will help improve your cash flow.

When you look at your business balance sheet, you will see assets listed including bank accounts. When you choose to accept barter as a currency (by joining a barter exchange), one of the things you should receive from your exchange is a monthly statement. Assuming this statement is positive, it will reflect as an asset for the business. Likewise, if your barter exchange allows you to have a line of credit – which many do – the account will show as a liability if is negative.

Most importantly is to make sure you use an accountant who fully understands how to work with barter exchanges. Some simply have not done it so it may be a little unfamiliar to them. The barter exchange can often be a resource to help your accountant get up to speed if he or she needs it.

At BASC Expertise, we have been bartering successfully for years. If you would like complementary consultation on how barter might be able to help you grow your business, please contact us. We can also make referrals to trusted barter networks that serve your area.