Thoughtful Thursdays – On bartering
Bartering has been around for as long as people have had goods and services to offer for sale and is quite viable if it makes sense for your business. Todays thought is about what to be mindful of when considering this type of transaction.
It is unlikely your business can survive solely on barter transactions, we all have bills to pay and not every supplier will accept good and services as payment. Having said that, there are times when it makes sense. I have worked with successful businesses that do not barter as a matter of policy and those who do offer the option.
A barter transaction is a sale where goods and services are exchanged in the place of currency. Invoices are still created and applicable taxes charged.
When considering a barter transaction, be mindful of the following:
- Value goods and services at list prices
- Do both businesses agree the goods and services to be bartered are of equal value?
- Are you in the market for the goods and services being offered? Were you going to make the purchase in the within the next month? If not, then barter may not be the best transaction.
- Will delivery of the goods and services be delivered in good time?
Bartering is good business when the circumstances are favourable well thought out.
Good selling,
Richard
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