Businesses accepting cryptocurrency as a payment method
Is it legal for businesses to accept crypto payments?
YES! If you are paying appropriate taxes on your income and the transaction is 100% legitimate, then it is considered legal.
How can a business accept crypto payments?
Set up a cryptocurrency wallet using platforms like Metamask, Bitpay, WazirX, or any other platform available in your country > Provide your customers with the barcode linked to your wallet > accept cryptocurrencies
Top companies that accept crypto payments
PayPal, Overstock, Whole Foods, Etsy, Starbucks, Home Depot, Shopify
Advantages of accepting crypto payments 1. Price volatility: This creates room for an added source of income for the business. However, if the market price of the coin experiences a drop the company would face a potential loss (risk vs reward).
2. Attracts more customers: When you open crypto-payment gateways, it might result in increased sales volumes.
3. Extremely low transaction fees: Most banking institutions charge merchants with a 2% to 4% fee on each transaction. For crypto's there is a minimum fee applied to each transaction.
4. Avoids chargebacks and customer fraud
5. Immediate availability of funds: For suppliers dealing with vendors in another country, this is the best option because there is no payment delay. Coins can be transferred from one wallet to another within a few minutes. Banks take about T + 3 business days to process international transactions.
Bookkeeping for businesses that accept crypto payments
1. Current asset accounts are created for coins that are accepted (BTC/ETH/LTC/XRP/DOGE)
2. Inventory balances for these coins are tracked & adjusted based on receipts & payments made.
3. Sales revenue is recorded against the invoice issued and coins received are tagged with an invoice number.
4. If there is a variance between the invoice amount and value of coins received (due to transaction fees or coin price fluctuations), an adjusting journal entry is passed to record a gain/loss immediately.
5. When coins are sold or used to pay vendors, the inventory balance is reduced on the balance sheet & a journal entry is passed to record "Capital gain/loss on currency fluctuation" depending upon the market price of the coin being sold/sent.
