* * ANNOUNCEMENT * *
Years Of BarterNews Issues Now In Digital Format
Welcome to the largest
repository of barter contacts, strategies, and barter techniques in
the world. All 64 issues of BarterNews now available in
digital format at
IRTA Europe Meeting Deemed Great
IRTA Europe is pleased to report the meeting in Gliwice, Poland, was
a great success. The conference was organized and hosted by BCI
Barter Systems’ Dariusz Brzozowiec; his team did a tremendous job
for all who attended.
meeting was represented by nine countries with 25 attendees from
Barter Systems, Poland
EBB-Euro Barter Business Belgium, Belgium
EBB-Euro Barter Business BarterServ, Germany
EBBS-International Business School, Netherlands
Metro Trading Association, USA
TBEX The Business Exchange, Scotland
Turk Barter, Turkey
IRTA President David Wallach and Executive Director Ron Whitney,
Elections, the members voted on a new European Chapter Executive
Committee as follows...
President: Richard Logie, The Business Exchange in Scotland
Vice President: Rob van Hilten, Qoin in Netherlands
Treasurer: Dariusz Brzozowiec, BCI Barter Systems in Poland
Secretary: Reiner Husemann, EBB-Euro Barter Business BarterServ, in
about both the upcoming Directive of the European Parliament and of
the Council on Payment Services in the Internal Market.
The group has discussed the working document of the EU. In fact the
EU will regulate all payment systems, which also effects the barter
industry. After short deliberation in the group we have come to the
conclusion that we need assistance to understand the circulation and
its possible impact. IRTA will order an assignment to summarize and
determine the impact of the working document, and will receive a
guideline for how the industry should react.
Trust: A topic of discussion presented by Reiner Husemann was to
form the IRTA Trust.
This program would have other IRTA Trust members take over existing
trade exchange clients should one file for bankruptcy or go
insolvent. In theory, this would avoid the overwhelming negative
impact on the industry seen in the past and minimize it in the
future. While not yet approved, further discussions are planned on
how to implement such a complex program and will continue at the
next IRTA meeting in September at IRTA’s 29th annual conference at
the Westgate River Ranch in Florida.
Consulting Service: IRTA has secured a talented group of
professional consultants that will support the members of IRTA.
This type of service will be extremely valuable to any start-up or
existing company. Specialists, for example, include: accounting,
marketing, sales, taxes and lobbying. All members will have access
to these types of support channels. (For more information please
e-mail: firstname.lastname@example.org. Details
forthcoming on the IRTA web site
Annual Convention: September 22 - 25 at the Westgate River Ranch in
Scheduled are several days of networking events, team-building,
learning and fun!
ITEX 26th Annual
Convention Hits Vegas In High Gear
ITEX Corporation (OTCBB:ITEX), a leading marketplace for cashless
business transactions in North America, announced its 26th annual
national convention will be held this week at the Orleans Resort and
Hotel in Las Vegas.
the Good Times Roll is the theme of this year’s convention for
brokers, franchisees and staff...the largest in its industry,” said
ITEX CEO/Chairman Steven White. “An outstanding interactive program
has been prepared for this convention.
have dedicated a solid four days to strategizing, sharing ideas, and
learning from each other. Attendees will leave this convention with
an arsenal of new tools to expand their businesses; new
relationships will be forged and others enhanced. ITEX is on a roll
and this convention is sure to be catalyst for a stronger and more
convention schedule is as follows:
opening day - including a question/answer session with CEO Steve
White, and a variety of franchise owner sessions focused on how to
better run their businesses.
focus is on new member registrations – addressing how to hire
effective sales people, prospecting tools, sales presentation tips
and strategies, ending with closing techniques.
is dedicated to trade directing - covering building member
relationships, delivering A+ customer service, and increasing
is closing day – with CEO Steven White giving the State of ITEX
Address, a franchise and marketplace review, ending with the Gala
Banquet & Awards Ceremony.
What Your Accountant
Should Know About The Business Of Barter
By Phyllis Malitz
today’s business world, barter—one of the oldest forms of trade—has
been transformed into a sophisticated way of doing business.
a result, trade exchange networks, the clearinghouses for those
wishing to barter, have flourished.
as more businesses barter, it becomes increasingly important for
CPAs to understand how such transactions work—especially the tax
ramifications—so they can advise their clients or employers. What
are the mechanics of barter in today’s business world? How should
you handle a company’s barter records at tax time? How do you tell
who can benefit most from the practice? Read on.
Businesses are discovering that barter not only has financial
advantages, but it has marketing benefits as well. Barter brings in
new business that could never be acquired in any other way. And, as
a bonus, there are no cash expenditures for this kind of marketing.
understand how barter works, first consider a “direct” barter
transaction: I perform a service for you and you pay me with your
product or service. This serves each of us well if:
a) each needs what the other is selling,
b) both products are of equal value, and
c) both represent a business expense.
because it’s usually difficult to get such a match—where the two
businesses need equal amounts of each other’s product—opportunities
for such direct barter transactions are limited.
That’s where a trade exchange network comes in. It can smooth out
transactions that otherwise wouldn’t be possible. The network deals
in units of currency called trade dollars. The goods and services of
one company in the network are exchanged for trade dollars that can
be used to purchase the goods and services of any other company in
network functions as a recordkeeper, sending each client a monthly
statement and charging a fee—usually 5% to 7%—for each side of a
Each member-company in the network is assigned a broker, who
notifies clients of new products and services, and searches out new
ones on request. The larger trade exchange networks have thousands
of clients, making them a viable source for many business needs,
such as office equipment and supplies, printing, advertising,
cleaning and maintenance services, professional services, and travel
Accounting For Barter
Tax Equity and Fiscal Responsibility Act of 1982 classifies trade
exchange networks as brokerages, so they are required to file 1099-B
forms listing the sales of client companies. Just as in the case of
a stock brokerage, the trade exchange sends a copy to each client
for use in tax preparation.
barter income is on the cash basis. Perhaps the most important
barter accounting concept is that the IRS treats barter transactions
as income received for both accrual-basis and cash-basis clients.
The value of trade dollars received must be included in gross income
for the tax year in which they are credited to the client’s account.
Since tax is due on this income in the year it accrues, companies
that are profitable should avoid having unspent trade dollars at the
end of the fiscal year. This is not a concern during unprofitable
years. As long as barter income does not put the company into a
profit situation, it will not be taxed.
the event of year-end excess barter credit, a trade exchange can
arrange tax-deductible, charitable contributions using barter...it
be used as compensation, too. A company can give the bartered goods
or services as a bonus or as part of a compensation package—without
tapping cash. Many companies conduct barter bonus or sales incentive
programs, using everything from restaurant certificates to resort
Just as business expenses covered through barter are deductible to
the same extent as cash, barter used as compensation is subject to
personal taxes. Barter used as a bonus or compensation for an
independent contractor must be included on the contractor’s 1099 as
non-employee compensation, and all barter compensation for employees
must be taken into account on their W-2s.
Barter compensation is subject to federal and state with-holding,
FICA, FUTA and SUTA. Taxes, of course, must be paid in cash.
Accountants can advise clients to use barter to achieve specific
business goals, including. . .
Cash conservation. Paying for business expenses with trade
dollars leaves more cash available for the payment of strictly cash
Barter lines of credit. Barter can be particularly useful
when a business needs to borrow money to relocate, expand, or launch
a marketing program.
barter line of credit may be easier to get than bank credit because
trade exchange networks look at a company’s capacity to pay back
through demand in the network, rather than through traditional
Many of the products and services associated with moving, remodeling
or marketing are available in trade exchange networks. Interest on
barter lines of credit is paid in trade dollars.
Marketing advantage. Because barter purchases represent lower
out-of-pocket cash costs, trade dollars often can be earned with
little increase in overhead and without advertising or marketing
barter network keeps clients informed of new products and services
available for barter. Some networks hold events such as holiday
shows, where clients have an opportunity to meet each other and
examine each other’s products or services.
further advantage of barter arises directly from the makeup of trade
exchange networks. Because radio, television and print media
companies can run additional advertising spots or ads with little
increase in overhead, they often participate in exchange networks.
This means network clients can finance ad campaigns by paying with
their own products or services.
Help with collection. Businesses can use barter to get value
out of otherwise uncollectible debts. Instead of chasing cash, which
might be nonexistent, the creditor can give the debtor company the
option to pay with its product or service.
That product or service is placed in the trade exchange network and
its value in trade dollars is transferred to the creditor, who can
spend it in the network. A company also can use barter to pay a debt
by offering to transfer credit it has earned to a creditor.
Theoretically, any company can barter to its advantage if the
network offers products or services the company requires, and if
there is a demand for the company’s products or services in the
network. Some companies may be particularly well suited to barter,
the best candidates are those with:
High T&E (travel and entertainment) costs. Restaurants,
hotels, stadiums and even some airlines barter, because they have
excess capacity in the form of empty seats and rooms that can be
traded for products and services for which they would normally pay
However, T&E taxes and gratuities must be paid in cash. Conversely,
trade exchange network clients with high T&E expenses can benefit,
because of the number of travel and hospitality choices available.
This includes companies that offer travel incentives to high
Products and services needed by hospitality firms. Companies
that sell or repair furniture, plumbing, air-conditioning and
heating systems, and those that offer cleaning, painting and other
services needed by restaurants and hotels, find their products and
services are in high demand in the network.
Excess inventory or capacity. A company with excess inventory
should consider barter before liquidation, because barter offers the
opportunity to sell at full price.
plumbing wholesaler with 500 faucets might earn trade dollars from a
Caribbean resort that would happily take such an item in quantity in
exchange for vacant rooms that still another client in the network
might use for a company retreat.
Companies with excess capacity are barter candidates because
capacity can be turned into extra business—business that costs the
company only the direct costs of producing their goods and services.
Seasonal fluctuations. For some companies, barter may not be
beneficial at certain times of the year.
furrier, for example, may be too busy in the fall and winter
seasons. But during the slow spring and summer, when inventory still
on hand is moving slowly and cash flow is light, barter business
probably would be welcomed.
A new product or service. Barter can be used in several ways
to lower the risk of introducing a new product or service—in test
marketing, for example—because it costs nothing in promotional
expense other than trade exchange fees.
addition, the direct cost of promoting a new product can be offset
by trading the product or service for advertising through the
Understanding the uses of barter and which clients can benefit from
it improves accountants’ adviser role.
CPA with clients that have decided to use barter should advise them
to limit barter income to the extent of their ability to spend the
trade dollars they earn. Companies new to barter usually find it
helpful to begin slowly, to get a feel for the ebb and flow of trade
Clients considering barter should be sure the prospective trade
exchange network is a member of IRTA, which sets a high standard of
business and ethical conduct for its members and is composed of more
than 250 companies.
client should seek a stable network—one that has been in business a
number of years and can offer references from companies that have
used the network for a year or more.
approached with care, barter can be an important business tool.
Phyllis Malitz, CPA, is the principal of Phyllis Malitz &
Associates, Ltd., a CPA firm with offices in Wilmette and Chicago.
She is a member of the Federal Income Taxation Committee of the
Illinois CPA Society, and the Barter Accounting Standards Work Group
of the International Reciprocal Trade Association.
Money-Making Reports Available From BarterNews
The Key To Profits During A Recession
following are eight ways to keep profits up in an uncertain economy.
Take a good hard look at what’s in your product line. Some hold
their own more than others and prosper in a recessive environment.
Determine what degree of emphasis each product should receive.
Some of your products might benefit from creative repositioning. The
reasons they sell during difficult times might be different from why
they sell during prosperous times. You might get a benefit by
emphasizing different aspects of the product.
Channel your marketing resources. During difficult times it might
make sense to put more resources toward your established clientele
than recruiting new prospects. They’re already customers, part of
the family. A dollar spent on an established customer might deliver
more than a dollar spend on recruiting a new customer.
keep in mind that your business costs have fixed and variable
components. Manage your variable costs as closely as possible.
Think of strategies to accomplish a reduction in markdowns, but be
careful not to hurt your customer service level.
Provide more stimuli for purchasing by assuming a more aggressive
posture on incentives to create increased sales.
Conserve capital investment. Do not be aggressive in your inventory
buying plans. Be more restrictive in additions to staff and building
Zero in on the services of your trade exchange to maximize cash
Work With Audio/Visual
Vendor On Barter
Collect cash, as usual, from the guest accounts staying at
your facility that require the use of professional AV
services. And rather than shouldering your ongoing employee
costs, or your current vendor’s cash agreement for AV
services, here’s a much better alternative:
Work with a proven national vendor (a sterling 25-year track
record) who will provide all of the AV services for your
hotel on a 100% TRADE BASIS! (Payment to be in the form of
Your hotel’s annual AV billings must be a minimum of
$200,000, and this offer is available only in the
continental United States.
For a confidential introduction contact Bob Meyer via
Attention Trade Exchange Owners:
If your member hotel(s) have a minimum of 10,000 sq. feet of
meeting space and annual billings of at least $200,000 for
AV services this is a great opportunity to earn substantial
cash service fees on the hundreds of thousands of trade
dollars your hotel member will be paying the vendor. Contact
Bob Meyer at the above e-mail.
How To Get More Sales In
Our street-smart restaurant
marketing report shows proven ways to rapidly boost your
restaurant’s sales & profits.
Our Web Site Has A Search Tool For You
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hitting the search button.
The Growth and Use of Secondary Capital (New Money) Creates
Unprecedented Wealth In Today’s New Age Of Possibility
many forms of secondary capital—which can be defined as any
financial instrument that measures and communicates value in a
common language. Would you like to see and learn more about the many
forms of secondary capital?
We have 70
free, informative and inspiring, articles for you in our “Secondary
Capital Section.” Check it out...
New Money-Making Ideas And Valuable Contacts!
You can obtain
useful, informative ideas and contacts in every available back-issue
barter company in the world is listed on our web site,
click through to our Global List
of Barter Companies.
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