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36
ACCOUNTING

Bartering Instead of Buying
 

Bartering for goods to conserve cash.
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Looking for relief from the credit crunch? To acquire the goods and services you need without decimating your dwindling cash? A growing number of companies are turning to barter.

In bartering, businesses swap what they have for things they need but don't want to pay cash for. By trading at the full price of the product (the cost plus your profit), you can boost your buying power while guarding your cash.

Traditionally, such transactions have been arranged directly between trading partners. But more and more deals are being booked through barter exchanges. For example, Chicago Barter Corp., based in Lombard, Ill., currently has in its network more than 1,200 members, who pay $500 to open an account and tap into anything being offered. In 1990, notes president Susan Groenwald, the company facilitated some $13 million worth of trading activity, a 44% increase in activity since 1989. The range of products and services obtainable is astounding. Last year Exchange Parts of America, a Chicago auto-parts company, traded its reconditioned brake parts for printing, remodeling, and catering services; this year it's negotiating to acquire trucking services through Groenwald's exchange.

Barter probably won't eliminate your need for cash entirely; many large transactions require at least some cash. But if you learn the ropes, you should be able to maneuver through leaner times with less cash on hand.

-- Bruce G. Posner

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You can find out about local barter exchanges by contacting the two trade associations serving the industry: International Reciprocal Trade Association, in Great Falls, Va., (703) 759-1473; and National Association of Trade Exchanges, in Euclid, Ohio, (800) 733-6283.

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Last updated: May 1, 1991




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