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Barter is Booming
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Article 2: Barter Benefits: Cash and Inventory
Control
In business, bartering helps you conserve
cash and more effectively manage inventory.
“Barter has always been used by business as an
efficient way of increasing sales and decreasing
cash expenditures,” said Richard L. Cravatts,
CEO and founder of
BarterItOnline.com.
Cash savings is cited as the number one benefit
of barter. By bartering, a small business
acquires goods or services without spending
cash. This is a definite plus for businesses
that suffer cash flow problems or for those
trying to save cash. Barter can also help speed
the payment of receivables. Slow-paying or
non-paying customers can relieve their debts by
bartering.
Bartering helps reduce cash outlays for overhead
costs. Many of the services offered through
barter—such as accounting, cleaning, gifts,
restaurant meals and travel—relate to overhead
costs. If you can obtain these overhead services
through barter rather than writing out a check,
you’re saving cash.
“The reason I like barter is because it’s an
effective way of retaining cash when you need to
buy something for your business,” says Trent
DiGiulio, founder of Computer Animation
Technology and a member of the barter
organization Tradaq. “People still need cash,
and barter is helpful in preserving cash as a
resource. Plus, there are a lot of operational
costs that are well suited for trading.”
Barter can also provide businesses with an
extended line of credit for little or no
interest. When you barter, you can owe people
goods or services, not money. So you pay no
interest on the debt—a major cash savings.
Bartering also allows you to improve inventory
management by converting excess products into
valuable goods and services. If you barter, you
avoid having to liquidate excess inventory
through drastic discounting. If your small
business experiences seasonal markets, barter
provides a profitable way to use the inventory
on a regular basis.
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