How to Include Employees in the Credit Clearing Process

Since employees are also consumers, and since labor is a major component at every level of the supply chain from retail to wholesale to manufacturing to basic commodity production, it is essential that ways be be found to include wages and benefits in the process of cashless exchange. The matter is complicated by the various legislative restrictions on how, and in what form, employees must be paid. While it may not be possible in many cases to substitute local currencies or trade (“barter”) credits for cash wages, it probably IS possible to pay employee bonuses and benefits in alternative exchange media.

In his comment to an article on this topic that appeared in Bob Meyer’s BarterNewsBlog, Harold Rice says, “Barter however IS a good way to pay staff benefits, thereby allowing you pay for chiropractic, dental, optometric expenses Etc. with before tax trade dollars.”

This is a topic that merits much more research and discussion.

3 responses to “How to Include Employees in the Credit Clearing Process

  1. Tom, I’ve been giving this topic a lot of thought.

    Involving employees in clearing is a “business process”, a series of actions with specific inputs and outputs. As an example, suppose an employee, Jane, of XYZ Ltd. has her car maintained periodically at Joe’s Service Center. Joe and XYZ are both members of a clearinghouse.

    1) Mary creates, in triplicate, an “proxy clearing standing order request” with Joe. She submits copies to Joe and to XYZ. The order would stipulate a maximum payable amount per month.

    2) Joe and XYZ would exchange confirmations and acknowledgments. XYZ has the capability to reduce but not raise the monthly maximum.

    3) XYZ would advise Jane that her request is approved.

    4) With each purchase or maintenance job, Joe would create (in quadruplicate) a “proxy salary deduction order” from Jane to XYZ and an invoice to XYZ.

    5) Joe would submit both these to the clearinghouse.

    6) XYZ would acknowledge both so they would be accepted for clearing.

    7) On its books, XYZ would post an AP with Joe, and a corresponding payroll retention against Jane.

    8) Jane’s payroll statement would show the deduction

    The above is tedious to describe, and probably tedious to work through, while in fact all of it would be handled by a few very succinct pages on the web site of the clearinghouse. (Virtualized in that way, the stuff about triplicate and quadruplicate is subsumed, of course.)

    The flies in the ointment, at the current point my thinking has reached on this topic, are:
    1) what incentives does XYZ perceive in engaging in all that extra red tape?
    2) Country dependent of course but, does this present negative or positive tax implications?



  2. Yes, Indeed… This reminds me of 2 things: One, a business I came across a few years ago called TradeDollars —

    I’d be interested in your take on that service..

    The other was about Alvin Toffler’s new book ‘Revolutionary Wealth’ in which he speaks of the Prosumer (contraction of producer-consumer) mega-trend going on right now.

    Interesting stuff.


  3. Tom, I agree with you, this topic does merit much more research and discussion. We intend to pursue it and hope others will provide their insights, observations, comments, and real-life experiences.


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