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ACCOUNTING AND BARTERCARD

Bartercard recommends that you obtain advice from an accountant experienced in the record keeping and accounting of Barter income and expenses. Bartercard has a network of accountants within the membership base that are highly experienced in providing advice on Barter, Accounting of which you can pay for their services using the Bartercard currency.

Cash and non-cash accounting

If you use the cash basis to report your income, you will account for your income when you receive payment and, similarly, you account for your expenses when they are paid. You receive or make a payment in a barter transaction when the recipient of the supply signs the docket or transaction slip to authorise the exchange of credit between the supplier’s and the recipient’s barter account.

If you use the non-cash basis, you will account for your supplies when you have issued a tax invoice or when any of the payment is received, whichever is the earlier. Similarly, you will account for any purchases when you receive an invoice for the purchase or when you have provided any of the payment for the purchase, whichever is the earlier.

Generally, businesses that have barter transactions will also have other transactions involving the exchange of money. The main method used to record income from barter transactions is to include them separately in a cash receipts book.

Use a pre-numbered invoice book to record barter and other transactions. This helps keep track of all transactions.
Maintain a filing system to keep track of transactions on barter accounts.
Record the value of barter transactions expressed in UAE currency in your sales record. You can record this in a separate column in the same cash receipts book you use to record your other sales or in a separate cash receipts book to account for your barter sales only.
Perform barter reconciliations between Barter Exchange statements and your sales record at least monthly.
Keep the barter reconciliations and the individual barter records for 5 years.

What does a typical system for recording payments from barter transactions look like?

The diligence required in accounting for Barter transactions is the same as that required for cash-based transactions. Basic requirements are:

Update and summarise barter transactions into a secondary record such as a cash payments book using individual barter records regularly. Record the value of barter transactions expressed in UAE currency. You can record this in a separate column in the same cash payments book you use to record your other purchases or in a separate cash payments book to account for your barter sales only.
Keep all invoices and file in a systematic manner.
Perform reconciliations between individual barter records, Barter Exchange statements and payments book at least monthly.
Keep the barter reconciliations and the individual barter records for 5 years.
What type of record keeping system should my business use?
 • The types of records needed will depend upon the nature and size of your business. For example, if you have many transactions and source documents per day, it is beneficial to keep summary records such as cash receipts and cash payments books. This will help you to manage your business because you can monitor how much money your business is receiving and spending, and this will assist in identifying any cash-flow problems. It will also help you to complete your activity statements.
 • Good record keeping is where you maintain a good filing system of invoices and purchase documents, record transactions or summary totals into a cash receipts and cash payments book and reconcile these amounts to bank statements and Barter Exchange statements on a regular basis.

Other relevant documents that you should retain are your application for membership of the barter exchange, the rules of the barter exchange and any other documents governing the relationship between members, and between the members and the barter exchange.
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