It is sometimes a little difficult to understand how using barter as a strategic business tool can increase profitability and improve cash flow. Let me explain... The first thing to remember is that when you open a Capital Barter Bank account you become a member of a network. A network of businesses that have an interest in doing business with you and not your competitors. The reason? You accept a currency that they enjoy using and have some of to spend; trade pounds. The business that comes from this new network of businesses is what we call incremental sales. Sales that you would not have access to had you not accepted trade pounds. The following diagram explains how incremental sales effect your business from the perspective of increased profitability. As we can see, income has increased. What is also noticable is that the trade pounds earned from the incremental sales have been used to reduce expenses by paying for expenses normally paid for with cash. The overall effect is an increase in the profitability of the business. Let us clarify that more by giving an example using some numbers... The first thing to notice here is that the incremetal business generated by the CBB members has resulted in an increase in net profit of £20,000. Let's explore those numbers in a little more detail... Sales have increased by £50,000 which has resulted in an increase in gross profit of £25,000. The £50,000 trade pounds earned have been used to pay for expenses that would normally be paid for in cash. After deducting trading fees the profit that finds its way to the bottom line is £20,000. Now, apart from the increase in profit, something else has very crucial and benefitial has happened. Because 50,000 trade pounds has been used to pay for expenses that would normally have been paid for with cash, your cash bank balance is potentially £50,000 higher than it would have been had you not used trade pounds. Remember, there are NO credit terms with trade pounds. As soon as business is transacted the trade pounds are credited to your account enabling you to spend them again immediately.