By cat
There is an interesting thing going on with some barter exchange management products. They think your exchange’s identity should take a back seat to their own.
Software, any software, is created for you to license or subscribe to in order to use. Bill Gates doesn’t require that every letter you print and mail have “Created by Microsoft” in the header and footer of the page. Then why should the software you use to run YOUR business have another company’s name in the forefront?
If your barter exchange is a franchise, then of course, the identity is the franchise’s, not yours. You paid good money to be aligned with a certain already created brand.
But when you are running an independent barter exchange, the brand identity throughout the website should be all about your company, not the software. For example, one software encourages you to change your company name so that the name of their software is in your name.
Another barter exchange management software has about 2 inches of space at the bottom of every page of your website talking about himself, his company, and how wonderful that software is. There is even a poetic quote on your company’s website attributed to the programmer’s mother. Really? And to add insult to injury, emails from the system go out with not your company’s name but the name of the software instead.
But as much as I dislike those two, I have to say there is a worse thief of your brand’s identity out there. A lesser known software allows absolutely nothing on the landing page of it’s users. I typed in the www. of a well known barter exchange only to land on a page that was blank except for a login form in the middle of the page, a logo at the top corner, and a couple of menu items. At the top a contact button brings up some contact information about the exchange. But when you click on the home button, guess where you go? NOT to the home page of the barter exchange paying good money to use this software. No, you are directed to the home page of the software.
Not every software out their puts their brand identity before yours. Barter21 is an excellent example but there are others. The problem as I see it is that so many exchanges are using the software that make them – the exchanges, second and the software first. When I Google exchanges I find that their online description devotes much to the software they are using and nothing to the exchange itself. Most barter platforms even put their own brand in the title bar of every page on your website.
As a barter exchange you need to develop your own brand and cultivate that identity. Software is just something you use. It is a tool to run the exchange. It should never be the identity of your exchange. So if your software is hogging up the entire spotlight and taking away from the brand of your exchange, you may want to look at other options. And here’s my plug – Barter21 puts your brand at the forefront. We have just a small logo at the very bottom of the page.
By Barry Cohen
As the owners of Premier Barter, a local barter exchange in Phoenix, AZ, it is not unusual for us to hear from potential new members that they would love to barter so they don’t have to pay taxes on their transactions. Their smile typically fades away when we explain to them that the IRS treats barter the same as cash, and that barter exchanges are required to report all sales via 1099-B forms. Of course, after we explain the benefits of barter and how to use it as a tool to generate more cash business, their smile returns.
As a provider of barter exchange software, BCL Soft’s Barter21 processes the 1099-B’s for our member exchanges. Not all providers do this, and if they do it is typically done wrong.
This is our first year in business and we knew we needed to set up our process right from the start. We thought the way the other barter exchange management software providers submitted 1099-B information was fine. After all they had been doing it for years. But when we did our research we found the information other software providers sent to the IRS was incomplete or just wrong. What does that mean for your exchange? It means your exchange could be flagged be the IRS. And if you are audited it could mean heavy fines for you.
Here are some things that U.S. based barter exchange owners need to know:
- If your barter exchange had a total of less than 100 transactions in the year, you are not required to report to the IRS - although it is a good idea to do it anyway.
- If a member of the exchange did a minimum of $1.00 in barter transactions, you must report the sale(s) on form 1099-B.
- All business entities must receive and report 1099-B’s. Sole proprietors, LLCs, and corporations. No exceptions.
- Corporations and LLCs get a single aggregate total 1099-B for the year.
- Sole proprietors are required to get one 1099-B for each and every transaction.
- The due date for furnishing statements to barter exchange members is February 15.
The question all barter exchange owners and members must ask themselves is this – Are my earnings being properly reported to the IRS? If not, why not? The last thing any of us want to do is throw up red flags to the IRS. Check with your software provider. Find out if they have been following the rules or making up their own rules. If they make up their own rules – it is your exchange that will pay the fines to the IRS, not your software provider.
Form 1099-B is very different from a standard 1099. Don’t take my word for it. Visit the IRS website and discover all the requirements for barter exchanges. http://www.irs.gov/businesses/small/article/0,,id=188094,00.html. Pay close attention to the Penalties section.
With all of the research we did, I have to give some credit to people for helping us along the way:
- Ron Whitney of the International Reciprocal Trade Association – www.irta.com – for answering simple and complex questions, and settling an argument or two.
- Kathleen R. Lindquist, CPA – www.kathleenrlindquistcpa.com – CPA extraordinaire.
- Scott Cain of Evergreen Exchange – www.evergreenexchange.com – Thanks for reminding me of the 100 transaction rule!
Reference document http://www.irs.gov/pub/irs-pdf/i1099b_09.pdf
Happy Bartering!
