Small Business Payment Options: Cash and More
You might have heard of businesses that have stopped taking cash. Paying by credit card or plastic is becoming the norm, even as dollar bills are defined as “legal tender for all debts, public and private,” according to Slate. The Federal Reserve measured the amount of actual physical cash (M0) at $688 billion in 2004, according to Wikipedia.
The Coinage Act of 1965 specifies that cash, excluding foreign gold or silver coins, is legal tender for the payment of debts, public charges, taxes and dues, according to Slate. The word “public” is key in this sentence though. The definition excludes private companies and individuals.
Private businesses can accept or decline cash for their goods and services. They can also decide to limit their robbery risk by not accepting higher-denomination bills or take pennies, even if the coins take more effort to count. Private businesses do not have the restrictions of public companies.
Barter is becoming an increasingly popular method of commerce, with 20 to 25 percent of world trade currently occurring under a barter system, according to the U.S. Department of Commerce (D0C). Corporate barter has reached the $20 billion mark as well. Ezine Articles reports that after joining their local barter networks, the membership fee and paying a small commission fee were inconsequential to all the other benefits of membership.
The variety of other merchants’ products can include hotels, rental cars and household needs like electricians, plumbers and landscapers. Flying and sailing lessons can be bartered for as well, according to Ezine Articles. Barter networks can be large or small and work in much the same way.
After joining a barter network, you receive a no-interest line of barter credit and when you trade your company’s goods or services, barter dollars are credited to your account. Barter dollars are par with U.S. dollar values, according to Ezine Articles. Your company is also printed in a network directory that allows other companies to contact your company directly.
When another company wants to trade its goods and services for yours, you agree on a price together, authorize the transaction and the barter network system tracks transaction details for you. Ezine Articles reports that statements for your barter activity are generated monthly and a small commission is paid on the amount of transacted barter dollars, similar to an interest rate on a credit card.
There is no need to value or declare goods and services transacted between network participants on income taxes, but they must be valued at fair market value, according to Small Business Notes. The fair market value must be recorded by each business and reported on their taxes in the year the goods and services were received. The costs incurred in performing the work involving a business or trade, may be deducted.
This system also helps businesses attract new business. Referrals and other network members are likely to return customers over competitors. You can maintain your cash customers and expand your customer base. Good news always travels fast. Some barter networks even pay their members a referral bonus when they recruit other businesses into the network, according to Ezine Articles. Businesses that provide services or products that do not exist in the network benefit the entire network.
Selecting a barter network is relatively easy if you have access to the Internet. Living in the state where a network is administered is not a consideration, but speaking with the person administering a network is very important. Ezine Articles reports that the administrator should answer all questions and should not give you a hard sell.
Checking participating businesses in the network may help you determine if you would do business with the network. Before funds are exchanged or pen meets paper, it is important to ensure all network conditions and trading rules are written and understood, according to Ezine Articles.
If you decide to join a barter network, help your business and the other businesses in the network by telling your friends and other business owners about barter. Become involved in the network. Meetings and mixers are available for participating businesses, according to Ezine Articles. These opportunities will help you develop business relationships in and out of the network.
Building relationships among small businesses is a basic strategic partnership. A prosperous business relationship can be a more integral relationship than great revenues, according to Small Business Notes.
The trend toward the non-acceptance of cash by businesses seems to mesh directly into apocalyptic visions. Being forced to accept “the mark of the beast” is our end before Armageddon, as declared in Revelation 13:15-18. Prophesy states that the mark would be required for any of us to complete all financial transactions, according to Slate. The Bible reads, "no man might buy or sell, save he that had the mark.”