Don’t Write Off or Write Down That Excess Inventory This Year End!

Many businesses face difficult decisions at the end of every year to write off excess or aged inventory in an effort to have the financial statements accurately reflect the financial position of said inventory.  Banks are now performing this every quarter for assets such as mortgages.  The progressive opinion of writing assets off will be paying less tax at year end based upon assets on hand.  However, the actual write down of said assets lowers your balance sheet and could directly impact your bottom line.

Don’t take that financial hit this year!  You have alternatives that will not impact your balance sheet or income statement at all.  You have the opportunity to take those assets that have been a balance sheet headache and trade or barter them for prepaid assets such as media.  There are many corporate barter exchanges that make trades like these every day and it is an absolute win-win for all parties involved.

A perfect and fitting example of such a trade would be a local bank that is carrying many foreclosed properties on its books nearing the requirement to write down one or more of said properties.  This bank might take one of those properties and trade it for the current value on the books for a prepaid asset that might be for marketing, advertising, promotional items, building maintenance or many other items with a corporate barter exchange.  This transaction would allow the bank to avoid any reduction in their balance sheet and/or bottom line impact in income.  This example uses a bank as the business and foreclosed property as the medium of exchange.  Other mediums of exchange such as excess inventory, aged inventory, prior year’s products, products nearing expiration and many other products covering numerous types of businesses are easily replaced with the above example.

While this example sounds great with no apparent downside, it must be said that spending the prepaid assets will require attention and patience.  These prepaid assets are not as liquid as cash and might take more involvement to utilize than cash.  Despite these facts, it is hard to argue that these creative financial methods would not have the ability to help many businesses in today’s economy.

“People don’t care how much you know until they know how much you care.”   —- Joe O’Malia