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FAQ's
Frequently Asked Questions
About Barter or Trade
(Be
sure to see also:
More Benefits of
Barter)
Q: Why do businesses trade?
A: Simply—to
make a profit. Trade is an inexpensive way for them to find new
customers. And every time they trade for something they need, they
conserve cash.
Trading inventory or services to cover some expenses costs them less
than paying with the proceeds from cash sales, so—they make a profit.
Q: Is trade legal?
A:
Yes! We
are officially recognized under the "Tax Equity & Fiscal Responsibility
Act" of 1982 in which companies like ours are identified as third-party
record keepers, along with banks, securities brokers, attorneys and
accountants.
Q: I need more cash business. Why should I trade?
A:
The sales you make through The Exchange are truly plus business for
you. If you did not belong to The Exchange you would never see these
sales.
When you use the trade income from these sales to buy things you would
otherwise have paid cash for, you are left with cash in hand to use for
other things. The net effect is the same as if your cash sales were
increasing.
Every time you save a cash dollar it is as good as earning an extra
cash dollar.
Q: Which Barter Company Should I Choose? Why Choose Exchange
Enterprises?
A:
We are independently owned and operated and
have been trading Goods & Services since 1983. We understand the
many ways you can use your goods and services to generate non-cash
income, get what you need and want, and build more traffic and
referrals. We can put you in touch with barter resources across
the country, or introduce you to a new trading partner down the street.
We offer all the tools you need to promote new business by using the
resources you currently have.
The following checklist
is a good tool to use:
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How long has the barter company been
trading goods and services? |
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Is the Barter Company independently
owned or a franchise: if a franchise, how long has the franchisee
been trading goods and services? (Not the corporate office)?
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Ask for references of businesses that
trade with them. Are they local to your business or home?
Have you ever heard of the company? |
Q: How do
Exchange members determine prices?
A: Members
sell to each other at their prevailing prices. They are not expected to
sell at specially discounted prices—e.g., a clearance sale price.
At the same time, members must not inflate their prevailing prices when
selling for trade dollars. One of the benefits of belonging to a barter
group is the ability to buy at close to your wholesale cost of goods or
services. Inflating prices erodes that benefit for other members and
will lead to termination of the offending account.
Q: Are you part of a
national network?
A:
Yes. We
are linked with other trade exchanges across America, which extends your
buying power.
Q: How does barter work through Exchange Enterprises?
A:
All
members have individual accounts managed by The Exchange. Each account
is provided with a debit card bearing that account's name and number.
Transactions are handled similarly to the way they are when you use
your bank debit card. When the member makes a purchase, the seller
phones The Exchange for approval and that amount is then debited from
the buyer's account and transferred to the seller's account.
At the end of each month every member receives an itemized statement
showing sales, purchases and account balances. For more details, click
on: How EE Barter Works or
contact us.
Q: Can I spend trade dollars outside The Exchange's immediate area?
A:
Yes, you
can. Through our contacts with other trade exchanges we frequently have
trade opportunities from sellers in other states. Exchange members have
traded millions of dollars with businesses at other trade exchanges
across America since our founding in 1983.
Q: How are my taxes
affected by trading?
A: Trade
dollars are treated exactly the same as cash for tax purposes. For
example, when your business sells for trade dollars, those dollars are
part of its income in the tax year—just like cash.
If your business spends trade dollars on business-related items, those
expenses should be offset against income—just like cash. (Exchange fees
are tax deductible.)
If you or your employees spend trade dollars on personal items, those
dollars are part of your taxable income—just like cash.
Q: How do I know how much barter income to include on my
tax
return?
A:
At
year end, The Exchange computes the proceeds from your barter sales and
submits this information to the IRS on Form 1099-B. Be sure to
include your bartering income from Form 1099-B in your total income when
filing your tax return. You are also mailed a copy of this form
for your records.
Q:
Does it make sense trading for personal items?
A:
It makes
a lot of sense to pay yourself something extra out of the proceeds from
any new business you generate, whether it is cash or trade. Paying some
personal expenses with trade can help improve your standard of
living—something every business owner aims to do.
Trade is a handy way of either making up for any shortfall in the cash
you can take out of your business or simply adding to your personal
income. Either way, it's great to be able to pay yourself more without
hurting your business.
Your
question not answered here?
Contact us
today! |
