A minimal administration group records the transactions, issues statements, publishes newsletters and updates trade directories listing all the goods and skills on offer to the community. The system administration requires only a small amount of currency for general commitments such as postage, photocopying and phone bills. People join LETS and are allocated an account. The local money transactions are recorded using a points system. When people enter into a transaction the result is recorded in their account.
People list services and goods they wish to offer, and nominate goods and services that they desire.
The value of the local money is decided in the individual transactions by what is transferred, but generally local money is seen as equivalent in value to the national conventional currency. On completion of a transaction, the buyer's account is debited while the seller's account is credited. In theory LETS is a zero sum game. A conventional cash component may be needed to cover costs and any tax liability for the seller, and the LETS units can reward the value added there-by transactions may combine components of cash and LETS units. When an account is in credit, the expectation is that there will be enough goods and services to fulfil a future desire or need.