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Barter Customers: How to Convert to Cash

GAAP and FASB rules allow bartering. When you use accrual accounting, you must recognize the provision of your service as revenue in the quarter you provide it. You recognize the service you receive from the other as an expense in the quarter that company provides it. You must issue Form 1099-B to any company you bartered with, including corporations. That’s the technical side.

If you enter into a long-term barter arrangement, you may wish to change that relationship to one based on cash payment. For example, You may start off as a newbie marketer with a brand new firm and barter for weekly hour long massage services. (I see both sides of this barter request on craigslist often!). Over the next year or two, you may grow to the point where your smallest customer pays $1,000 per month and your massage barter is only “paying” you $400 in services. You don’t want to increase your massages to 2.5 hrs per week, so you need to convert to paying in cash or drop the massage therapist as a client.

Inc_magazine_-_take_the_money_and_run

Read Inc. magazine’s online article, Take the Money, to learn more about converting your barter customers to cash customers.

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About Tiffany C. Wright

Hi! I,Tiffany C. Wright, am the author of the ebook, "Help! I Need Money for My Business Now!!" and the book "Solving the Capital Equation: Financing Solutions for Small Businesses", available on Amazon. I am the president of Toca Family Business Services, a short-term & project-based interim management & strategic and financial advisory firm, located in Atlanta, Georgia. In the past five years I've helped small and medium companies restructure and obtain over $31 Million in financing and a similar amount in purchase orders and contracts. I have an MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania and a B.S. in Industrial and Systems Engineering from The Ohio State University. Personal: I enjoy investing. I am a prodigious reader of everything from business books, magazines, and newspapers to horror and popular fiction. I read 4-6 books per month. I also love to travel. I've been to 33 countries on 5 continents and lived in Japan for 2.5 years and aim for a foreign locale twice a year. I am also an athlete and run track on the Master's Circuit. The highlight was placing 7th in my age group in the 2007 World Master's Track and Field Championships in Italy.

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The Resourceful CEO, Tiffany C. Wright

the president of Toca Family Business Services, a strategic and financial advisory firm which provides short-term & project-based C-level management. She is the author of Solving the Financial Equation: Financing Solutions for Small Businesses, available on Amazon.

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