Business Information Slide Show

produced by BerkShares, Inc.P.O. Box 125

Great Barrington, MA 01230

(413) 528-1737

What are BerkShares?

BerkShares are a local currency for the Berkshire region.

A way of encouraging consumers to buy local products and services

A useful tool for community & local development

A way to increase patronage of local businesses.

• Since the launch in September of 2006 over 2 million BerkShares have circulated within our local economy

• There are approximately 180,000 currently in circulation

• People who choose to use them are making a conscious commitment to buy local first

• Local currencies, widely used in the 1900s, are again being recognized as a tool for sustainable economic development, throughout the country and the world.

• BerkShares help strengthen our regional economy, favoring locally owned businesses, local manufacturing and local jobs, and reducing our region’s dependence on an unpredictable global economy.

BerkShares come in five denominations:

BerkShares are placed in circulation when citizens exchange federal dollars for BerkShares at any of 12 branches of the five participating banks shown here:

Pittsfield Co-operative Bank, Great Barrington Branch

Berkshire Bank, Two (2) Great Barrington Branches, Lee, Sheffield, Stockbridge and West Stockbridge branches

Lee Bank, Great Barrington, Stockbridge and Lee Branches

Salisbury Bank, Egremont & Sheffield BranchesLenox National Bank, Lenox Main St. Branch

Banking With BerkShares

• If you don’t currently bank at one of these exchange banks they will open a BerkShares account for you at no charge

• The current exchange rate gives the BerkShares purchaser a 5% discount when exchanging their federal dollars. That means if or when you deposit your BerkShares, the bank will deposit federal dollars in your account at ninety-five cents per BerkShare

Why BerkShares?

Think about the values printed on each of the bills:

• Community – BerkShares foster stronger community connections through personal transactions and local trade

• Economy – BerkShares are a tool for strengthening the local economy by prioritizing the local exchange of goods and services

BerkShares Values continued

• Ecology – By encouraging people to shop in town, instead of on the Internet, BerkShares decrease the distance that goods need to travel, which in turn curbs climate change.

• Sustainability – By promoting the local production and consumption of food and other goods, BerkShares are helping to build a sustainable future for Berkshire County.

Several excerpts from an essay by Wendell Berry on conserving communities: (Another Turn of the Crank, 1995, Counterpoint, Washington, D.C.) further support using BerkShares

Berry writes: “Supposing that the members of a local community wanted their community to cohere, to flourish and to last, they would:

• Always ask how local needs might be supplied from local sources…

• Strive to increase earnings (in whatever form) within the community, and decrease expenditures outside the community

• Acknowledge that money paid into the local economy should circulate within the community for as long as possible before it is paid out

• Look into possible uses of local currency, community-funded loan programs, systems of barter and the like

Always be aware of the economic value of neighborliness. Community members must realize that in our time the costs of living are greatly increased by the loss of neighborhood, leaving people to face their calamities alone”

“A sustainable rural economy will be dependent on urban consumers loyal to local products. Therefore, we are talking about an economy that will always be more co-operative than competitive”

BerkShares Exchange

• BerkShares can be exchanged for federal dollars at a rate of $0.95 / BerkShare.

• That means when you go to the bank to purchase your BerkShares, at the current exchange rate you are getting a 5% discount. For example, for 100 Berkshares you pay $95 federal dollars.

• There is an easy BerkShares to dollars conversion chart available.

Businesses who sign up for BerkShares may have as many stickers as you require for your

business. Stickers should be prominently displayed on windows or doors, cash

registers, etc.

People with BerkShares in hands will look for the sticker depicted at left to know where to spend their BerkShares, or

can look online at www.BerkShares.org and view a list of participating

businesses.

New stickers (pictured here) are beginning to make their way onto shop windows.

Note the wording “Some Restrictions may

Apply!”

Each business may add restrictions to accepting BerkShares as needed to

make the program work to your greatest benefit.

For the benefit of your customers be sure your restrictions are clearly stated

and/or posted in a visible location.

Training Your Staff

To realize the greatest benefit from working with BerkShares, everyone must be on board. It’s up to you to help your staff understand how to handle them and also be sure they’re gracious when accepting them.

• Be sure you share both your knowledge and your enthusiasm with all staff members.

• Help staff understand that BerkShares are essentially cash and should be handled in the same manner. It is suggested that you devote a separate slot in the cash drawer to hold them.

• One big difference between BerkShares and federal dollars is there is no coinage for change. You have the option of asking for both BerkShares and US Dollars for a transaction that is not an even dollar amount

• Be sure cash drawers have enough small BerkShares bills in them to enable staff to give change in BerkShares for a BerkShares transaction

• Encourage staff to engage your customers and ask if they would like their change in BerkShares, whether or not they pay in BerkShares.– Often people can’t get to the bank and will gladly accept

them.– The novelty of holding one for the first time could create

an immediate new user

• Always have a supply of BerkShares directories on hand to give to customers. They give the background of the program and a relatively current listing of who accepts them.

• The more places people know they can spend them, the better the circulation will be. The better the circulation, the stronger the program.

BerkShares Accounting:Contents

• Setting up your accounting system for BerkShares• Receiving payment in BerkShares• Paying invoices in BerkShares• Depositing BerkShares• Exchanging Federal Dollars for BerkShares• Supporting Non-profits with purchase of

BerkShares• Non-profits receiving charitable donations in

BerkShares• Acknowledging donations made in BerkShares• Other Recommendations

Setting up your accounting system for BerkShares

•Set up a separate current asset “BerkShares cash account” (like a petty cash account) in your QuickBooks or other accounting program

•Set up an expense line titled "BerkShares discount." (like accounting for credit card fees)

•BerkShares are cash, so it is also important to establish a secure place for BerkShares-on-hand.

•Prepare a "Paid in BerkShares" envelope for receipts, much as you have for petty cash.

Receiving Payment in BerkShares• Remember that BerkShares are cash and customers will

want a receipt on payment.

• Record the payment as a debit to the "BerkShares cash account" at the full amount received in BerkShares.

• We recommend calculating and collecting sales tax at the full dollar amount of sale. Sales tax can be collected in BerkShares or in federal dollars.

• Credit the appropriate inventory line for the full amount of the sale as you would when recording payments with checks.

• The total number of "BerkShares-on-hand" in a secure place should always equal the total amount in the "BerkShares cash account."

Paying Invoices with BerkShares• BerkShares are cash. Payments should be made in

person. Remember to have a copy of the invoice so that you can have the vendor verify payment and date. This signed receipt will go in your "Paid in BerkShares" envelope for backup purposes.

• Credit the "BerkShares cash account" for the full amount of the payment.

• Debit the appropriate expense line with the same amount as you would with purchases made with checks. This practice ensures all normal inventory controls are in place.

Depositing BerkShares

• If you find that you have more BerkShares than can be spent with vendors, given in change to customers, or paid to employees as a percent of salaries, then BerkShares may be taken to one of the five BerkShare Exchange Banks and deposited at ninety-five cents on the BerkShare.

• If you do not currently bank at one of the BerkShare Exchange Banks, you will need to open an account. Each of the banks is offering a no-cost checking account for new BerkShares businesses.

• Prepare a separate deposit slip for your BerkShares deposit.• The bank will then deposit federal dollars in your account at ninety-five

cents per BerkShare or give you the funds in cash.• For your accounting purposes, if the amount of BerkShares is 100, credit

the "BerkShares cash account with 100"; debit your business checking account for $95, and debit the "BerkShares discount" expense line for $5.

• The "BerkShares discount" is shown as a business expense (much like a credit card fee or stock broker's fee) and the total taken from profit at the end of the year in determining your federal and state income taxes.

• The intent of the program is that more business transactions will take place as a result of BerkShares promotion of local businesses, which can help make up for the discount if you’re unable to re-spend all you receive.

Exchanging Federal Dollars for BerkShares

• If you are using more BerkShares than you’re taking in, the process is the reverse of depositing them.

• Write a check to BerkShares for a multiple of $9.50, say $475 federal dollars.

• Take the check to one of the five Exchange Banks. • You will receive 500 BerkShares. Credit your checking

account for $475 to record the check.• Credit the "BerkShares discount" expense line with $25 (this

is new value to your business). • Debit your "BerkShares cash account" with $500. • Place the 500 BerkShares in the secure place you have

already established, waiting to pay bills!• The total number of "BerkShares-on-hand" should always

equal the total amount in the "BerkShares cash account."

Supporting Non-Profits with BerkShares

• At least one non-profit holds BerkShares acquired at the 5% discount rate from a BerkShares Exchange Bank.

• Supporters of the non-profit can then purchase BerkShares one-to-one for federal dollars and the non-profit retains the 5% difference for its charitable purposes.

• Write a check to the non-profit for the number of BerkShares you wish to acquire.

• Note, this is not a charitable donation as you are receiving value in BerkShares.

• Arrange to take the check to the non-profit and pick up your BerkShares.

• Credit your checking account for the amount of the check.• Debit your "BerkShares cash account" for the same amount

which should equal BerkShares received. • Place the BerkShares in the secure place you already

established, waiting to pay bills!• The total number of "BerkShares-on-hand" should always

equal the total amount in the "BerkShares cash account."

For non-profits: Receiving charitable donations in BerkShares

• After discussion it was decided that since the legal exchange rate for 100 BerkShares is $95, that the charitable donation must be acknowledged at this rate.

• Remember that BerkShares are cash and donors will want a receipt on payment.

• Record the payment as a debit to the "BerkShares cash account" at the full amount received in BerkShares--say 500 BerkShares.

• Credit the appropriate donation line at .95 of the total donation--$475 using the above example.

• Credit the "BerkShares discount" expense line with $25. • Place BerkShares in a secure place.• The total number of "BerkShares-on-hand" in a secure place

should always equal the total amount in the "BerkShares cash account."

Non-Profits:Acknowledging BerkShares Donations

• There are two ways to prepare a formal thank you letter for the donation which meets IRS requirements for the donor to receive tax credit:

• a. Acknowledge the donation of 500 BerkShares. It is then the responsibility of the donor to declare the cash value, much like a stock donation.

• b. Acknowledge the donation of 500 BerkShares and then go on to say that because the exchange rate between federal dollars and BerkShares is 9.50 to 10, the tax value of their donation is $475.

Other Recommendations/Reminders

• Issue a specific amount in BerkShares each day to each cashier so when payment is made in BerkShares, change can be given in BerkShares.

• Keep BerkShares together in your cash drawer.

• Handle sales just like cash transactions.

• Encourage change from federal dollars transactions in BerkShares (many customers do not have time to go to the banks and like to trade in BerkShares even without the 5% discount).

• Keep a sufficient quantity of BerkShares on hand in a secure location to pay bills.

Other Recommendations, Cont.

• Reference the published list of businesses accepting BerkShares to be creative about where to recirculate them, and check www.BerkShares.org often for the most up-to-date listing.

• Ask if a business will accept full or partial payment in BerkShares, even if not listed in the BerkShares directory.

• Do not hesitate to place restrictions on acceptance if you need to.

• Support branding of BerkShares by adding "BerkShares Accepted" in your advertising. Add a BerkShares link to your website. Ask customers if they have or know about BerkShares.

Spending Your BerkShares

• Legal and accounting• Advertising & consulting• Office design, maintenance, equipment, services & supplies• Employee compensation/bonuses• Food for staff/events• Website design & development• Change for sales (whether made in BerkShares or not)

There are many places you can spend BerkShares, and many ways to use BerkShares received as payment for business expenses. Remember, you don’t give a discount for a BerkShares transaction unless or until you return the BerkShares to the bank, so look for a way to spend them!

Possibilities include:

Visit www.berkshares.org for a complete list and more ideas that may work for your business

About BerkShares, Inc.• The Purpose of BerkShares, Inc. is to

initiate, encourage and administer educational and practical programs to further regional economic self-reliance in the Berkshires.

• Membership in BerkShares, Inc. costs 25 BerkShares annually.

• Proceeds go to support the organization and its efforts to make a viable local currency for the Berkshires a reality.

• Any resident of the Berkshire region may become a member - show your support today!

To join, please send 25 BerkShares (checks in federal dollars also accepted) to:BerkShares, Inc.P.O. Box 125Great Barrington, MA 01230

Include your name and address and, should you choose, an email address and phone number.

Additional donations are most welcome.

Your Feedback is Always Welcome

• All ideas for new businesses you’d like to see accept BerkShares are welcome.

• Encourage new businesses, especially your local vendors, to sign up. The more ways we all have to spend them, the longer they stay in circulation.

Further Questions?

• If this is unclear, or if you wish more detailed instructions on how to account for BerkShares, first look on our website, www.BerkShares.org.

• If you still need further assistance, please call us! We’d love to hear from you. The BerkShares office can be reached at (413) 528-1737.

“A good community, as we know, insures itself by trust,

by good faith and good will, by mutual help.

A good community, in other words, is a good local economy.”

-Wendell Berry