Barter transaction is basically the exchange between two different parties interested in each other’s goods and services. The business transaction lacks any monetary medium and depends solely on the double coincidence of want. While barter system was an inherent part of our history, it had disappeared through the ages, especially with the rise of the concept of money. The arrival of a new and upgraded barter system is changing the corporate world, making barter transactions between two parties a household game.
In simple words, bartering is an exchange of products between two individual parties. If one person has apples and he wants some oranges, while another person has some oranges but what he really wants is some apples, they can exchange these goods in a barter exchange. Apart from the exchanged products, no other medium like money is required.
The modern barter transactions are based on smart barter solutions where companies are not obligated to buy or sell their part of the transaction immediately if they do not want to. The business transactions contain a medium of currency known as barter credits. If one of the parties do not want the other parties good or service right at the moment, he can get his part of the transaction in barter credits that he can use any time he wants.
Most of the modern barter is based on the exchange of services. If a cleaning company makes a barter deal with an accountancy firm to clean their offices in exchange for managing their tax and accounts, this is a barter transaction. Even if the cleaning company does not have the monetary support to hire a recognized accounting firm to do their books, they can easily offer their services and get what they want.
Advertising has also taken a critical role in the modern barter transactions. Advertising agencies offer their ads space in exchange for some goods and services they might want from other companies. An advertising agency can have a barter transaction with a hotel agency where they will advertise the hotel’s brand in exchange for getting a number of hotel rooms for their employees. These smart barter transactions not only save you from spending unnecessary money but also helps you trade excess inventory, increase your purchasing power, and much more.