Affiliate Accounts - As the system gets bigger and bigger and sales potentials become higher for each business, the question of personal spending and affiliate accounts get brought up more often. I'm wanting to clear the air and explain exactly how this works.
When you come to a time when you need to make a decision: take on a BarterPay job or decline a BarterPay job, we feel deep down that we want to do the job, but if you've already banked up T$20,000 without a set place to land them for your business yet, you wonder why. I get it. But at this point in our province right now, nearly every business owner is building, expanding, renovating, or investing in something, whether personally or for the business.
There are many ways to use the T$ to your advantage so that you don't have to decline sales. The main one is to set up affiliate BarterPay accounts for the owner(s). Here's how it works:
You bank up T$10,000, and have an option to gain another T$5000 sale, but you don't have immediate expenses for your business that you can trade for. You don't want to turn the business away, but banking up more now feels like not a good idea. Meanwhile, the you and your partner (owners of the business) are both doing personal renovations and repairs at your own homes. You need granite and blinds, while your partner needs drywall, painting, and new area rugs.
The solution: set up two BarterPay affiliate accounts for Owner One and Owner Two. You declare T$ dividends to the two owners so that they can complete their renovation projects, and you keep the cash flow in the business to pay for the things that T$ can't. Will you pay taxes on the dividends? Of course you will. But you would have paid the same taxes on the cash. There is no difference other than everything you trade for guarantees you an equal amount of business in return. The business pays the 12.95% commission at the time of the transfer, and the owners then spend commission free with no further tax implications.
The reason why this is such a great idea is because businesses are consumers of fewer products/services than most average people are. An affiliate account pays no monthly or commission fees. You receive still receive an email statement and can also view your account online.