BUDGET TRADING and ON-GOING CONTRACTS

 

Most businesses prepare an annual budget.  For some it is very detailed/high-level and others it is merely a guideline.  Regardless of the level of detail here are some questions you need to consider in order to take advantage of trade: 

 

1)      Am I willing to change vendors or would I prefer to maintain a relationship with the current supplier?

2)      How much savings would I need to gain in order to make a switch?

3)      Which expenses would be easier to obtain through trade (i.e. it is easier to obtain services /  advertising than items in the capital budget)?

4)      Am I comfortable bringing my TRADEbroker in as a consultant when formulating my budget?

5)      Are there areas of my budget where spending more would be advantageous if revenue was available (e.g. outside cleaning service, marketing, staff / customer incentives) 

 

 

The standard rule for Tradebank transactions is that single amounts up to $5,000 taxes included must be full trade; with annual contracts or annual supply budgets the $5,000 threshold can be based on the annual amount.  For example, a manufacturer hired a large cleaning company to clean the plant on a weekly basis for $500 a week (ie $26,000 for the year).  A cash / trade ratio could be negotiated on the contract as a whole.  The TRADEdollar percent/ratio should be clearly stated in the contract. 

 

The details of the contract could include one of the following:

 

1)      A portion of each invoice payable in TRADEdollars at the time of invoicing.

2)      A prepaid deposit in TRADEdollars (out of which a portion of each future invoice is paid).

3)      An agreement that after $X is paid in CDN dollars the next amount of business is paid in T$.

4)      An escrowed amount that is released as invoiced.

 

Obviously deals with a cash portion are less attractive than getting the product / service for full trade.   However, an on-going cash amount can lock-in a deal and make it more feasible for a supplier to continually provide a portion in TRADEdollars.  By signing an on-going contract, the need to go back through the TRADEbroker for each request from the vendor is removed.

 

 

 

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