Our customers ask us a number of questions. We have compiled a list of the most common questions and answers below. Click on a question to see the answer.

1. How do the taxes work?
2. Can I obtain a copy of the Cardholder Agreement
3. Does the Tradebank statement "standalone" as tax documentation?
4. I've swapped products and services with other businesses. Why do I need Tradebank?
5. What are Tradebank Dollars (T$)?
6. Can I create a deficit in my account?
7. In general, are the prices inflated within a barter system?
8. Does a business have to offer all of their products or services on trade?
9. What is C.O.G.S (Cost of Goods Sold)?
10. How do I know who else is in the network?
11. Can I donate my trade dollars?
12. What does the CRA have to say about Tradebank?
13. How will you promote my products and services?
14. Will you sign up more than one business from each category?
15. Can I deposit my trade dollars into a Canadian registered bank?
16. Can I have more than one account?
17. Can I offer trade as an incentive to my employees?
18. Can I recover my C.O.G.S. in cash when selling my products and/or services?
19. Who can I trade with?

 

1.  How do the taxes work?

There are no advantages or disadvantages when it comes to accounting for taxes when participating in a barter transaction. When processing a sale, all appropriate taxes (GST/HST/QST/PST) are to be added to the total before obtaining an authorization number from Tradebank. The seller must remit these taxes to the Canada Revenue Agency (CRA), and if the purchase is for business the buyer can obtain an input tax credit from the CRA.

2.  Can I obtain a copy of the Cardholder Agreement

Yes. It can be found here: http://www.tradebankcanada.ca/files/Cardholder_Agreement.pdf

3.  Does the Tradebank statement "standalone" as tax documentation?

In a similar manner to credit card statements you must maintain the back up invoices/contracts for the individual transactions you are claiming for tax purposes.

4.  I've swapped products and services with other businesses. Why do I need Tradebank?

Trading through Tradebank is easier than trading on your own. We expose your business to more new prospects and help you increase your sales. Because Tradebank has a network of over 8,000 member businesses, you don't need to conduct one-to-one trades (that is, you don't need to buy from the client you're selling to). Tradebank makes it very easy to buy the goods and services you need to run your day-to-day business operations.

5.  What are Tradebank Dollars (T$)?

The T$ is the official currency of Tradebank. Trade transactions between companies are actually converted to trade credits or "trade dollars" (one trade dollar is equal to one CDN dollar in value) and are reflected as debits or credits in each trading company's "trade account".

The T$ to CDN$ conversion rate is fixed at 1:1.

6.  Can I create a deficit in my account?

No. You must have sufficient TRADEdollars in your account to continue making purchases within the Tradebank Network.

7.  In general, are the prices inflated within a barter system?

The short answer to this question is no, although there is a difference between inflated pricing and fair market retail pricing. Also, when doing price comparisons if you are comparing between a national chain (eg Walmart) versus a small local store, the national chain typically wins the price war but may not offer the same level of customer assistance / knowledge or product quality.

8.  Does a business have to offer all of their products or services on trade?

No, there are several instances where a company may only offer certain products / services on trade.

1. If a company has a loss leader they would not be required to offer it on trade.
2. If a company has a sale they can choose whether or not to offer the products on sale for trade.
3. If there is a particular product/service that has an extremely high COGS it may be excluded.

However, if you have the type of business where a customer can't obtain benefit from one of your services without obtaining another one of your services the total service should either be offered on trade or none of the service should be. This is easier to explain in specific business examples - please discuss with your broker.

9.  What is C.O.G.S (Cost of Goods Sold)?

The direct costs attributable to the production of the goods or services sold by a company. This amount includes the cost of the materials used in creating the good along with the direct labour costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs. In considering selling through a barter network, the cost of goods sold that you should be utilizing in calculations are the direct costs in the additional business. Unlike traditional cost of goods sold allocations of fixed costs are not applicable in the decision making process for these transactions unless additional labour or capital will have to be acquired in order to complete the work. Examples of direct costs or cost of goods sold includes wholesale cost of product sold, labour (only when employee would otherwise not have been paid), materials cost.

10.  How do I know who else is in the network?

Logging into mytradebank.com, calling your broker, attending all Tradebank functions, viewing the printed directory and reading myTrade magazine are five ways to stay up-to-date, in terms of information on new/current members. Creating a relationship with your Trade Broker is the most effective tool.

11.  Can I donate my trade dollars?

Click here to read the response from Canada Revenue Agency.

12.  What does the CRA have to say about Tradebank?

Click here to read the response from Canada Revenue Agency.

13.  How will you promote my products and services?

We will promote you service through the following means at no additional charge:

• directory listing on myTradebank.com
• article in myTrade magazine (at the editors discretion)
• weekly Tradeflashes
• unlimited classified listings
• word of mouth from Tradebank broker to clients
• Tradebank broker directing requests for the products/services you sell to your business

Promotion available for trade:

• advertising space in myTrade magazine and / or Tradestreet Journal (US publication)
• booths at tradeshows
• other functions (some will be no charge)

14.  Will you sign up more than one business from each category?

Yes, each region will be looking to fill their roster of clients in each category. Some categories will require there to be multiple clients in a particular region (eg. Restaurants) or the business will be swamped with trade customers. (Typically trade business should be no more than 15% of a businesses overall revenue. A client can request to be exclusive in a category so long as that business can fulfill all requests from other Tradebank clients for their particular services within their area.

15.  Can I deposit my trade dollars into a Canadian registered bank?

No.

16.  Can I have more than one account?

Yes, if you have multiple businesses you may have more than one account. Also, you can have an affiliate account (see below) for personal spending.

17.  Can I offer trade as an incentive to my employees?

Yes, there a multiple ways to offer trade incentives to your employees.

1. Affiliate account: if you will be giving a particular employee or group of employees on going trade benefits then opening an affiliate account is beneficial for you and the employee.
2. Gift Certificates: local regional offices often have gift certificates available for sale and if you are offering a small one-time bonus it often makes more sense to do the gift certificates rather than providing an affiliate account.
3. Direct Purchase: you can arrange to do a direct purchase from your account for a product or service for your employee. This is best utilized when there will be one big transaction and not on-going utilization of trade by the employee.

18.  Can I recover my C.O.G.S. in cash when selling my products and/or services?

It depends. Tradebank has a policy that all transactions below T$5000 must be on full trade. If a transaction is above T$5000 then a cash / trade blend can be discussed. For example, if a company was having a roof put on their building and the cost was going to be $30,000, the contract for the roof could be arranged such that 60% of the deal was going to be for trade. The 40% cash may be enough to cover the C.O.G.S.

19.  Who can I trade with?

You can trade with any client in our network. Through the network there are over 100,000 products and services available.