How Barter Works

Barter is one of the oldest forms of commerce which began as a one-on-one trade and has developed into a worldwide computerized trading network with barter exchanges acting as brokerage firms who enhance businesses through the exchange of goods and services instead of cash.

Barter is just conducting normal day-to-day business without spending cash. It’s a secondary currency which is a cashless system that increases your cash business. Before cash came along people were doing just fine with barter. What most people don't know is that modern barter still works today and can be highly rewarding and profitable.

What are the goals of every business? Increase your sales by driving more customers to your business. And, decrease the costs involved in doing business. Combined, you’re business is far more profitable.

If you don't get into barter, you are almost guaranteed to lose business! You can "deposit" your time into a "barter bank" and "withdraw" it for later use. You have fixed costs to pay anyways, so by trading you generate income.

Buying

• Making purchases is easy.
• You can use barter checks, trade scrip, or gift certificates.
• Once you know what you want you can search through our member directory, online trading floor, or contact your broker and simply pay using barter dollars.

Selling

• Making a WNY Barter sale is no different than a cash sale except for the form of payment.
• A prospective customer will be much more likely to buy from a WNY Barter member than spend cash with a competitor.

Accounting

In the United States, trade exchanges were classified by law, as of August 1982, as third-party record keepers as defined by the TEFRA Tax Equity and Fiscal Responsibility Act of 1982, which states that exchanges are required to report to you and the IRS your sales for the year on a 1099B form. All tax payments are applicable as if the trade credits and purchases were made in cash, meaning $1 barter equals $1 cash.

There are no advantages or disadvantages to trade in a barter exchange. Trade credits should be viewed as you do your cash income within the calendar year. Please consult your CPA or tax professional to determine the best way to record and account for trade business.

For more information please read this IRS article on barter exchanges.