There are a few issues to consider before determining what sort of finance method to use when purchasing a photocopier, be it leasing, hire purchase, rental or other form of finance.
A good way is to conduct a cost vs. benefit analysis. This will ensure that the benefit you get from a photocopier will provide an adequate return on investment. For office copiers, the equipment itself does not actually generate revenue, and so it is more difficult to measure. One of the main benefits usually is the ability to do copying and printing in-house, rather than paying for it at a print/copy shop. Depending on the volume of copying & printing done, there is often a break-even point for a business where purchasing a photocopier for in-house copying, printing, scanning etc. will be more cost-effective.
Most businesses rent or lease their photocopiers. The main reason for that is that no capital is being tied up and instead can be utilise for other purposes. Additionally, because copier technology progess quickly, finance methods such as renting provides an easy upgrade alternative.
Renting or leasing costs more in the long run for products which are financed. They do become a competitive option that must be consider seriously. Be meticulous with rental or lease agreements which include the service component of the copier or multifunction device and charge of the combined rental and maintenance cost on a per-copy or per-print basis. It may look attractive overall, but complex 'contract' language around minimum volumes can disguise higher costs in the future. When financing a photocopier purchase, make sure that whichever method you decide is best for your business, and that you understand all the terms and conditions of the agreement.
Main features of Photocopier Lease
• Preserves working capital for other purposes
• Risk of owning an obsolete device
• Accounting maybe more complex - depreciation of asset
• On balance sheet reporting as an asset/liability
• Residual value liability
• Contract to be paid out in full prior to upgrade
• May involve early payout penalties
• Less flexible upgrade path if required during contract period
• Directors guarantees may be required
Main features of Photocopier Rental
• Ability to upgrade - reduces equipment obsolescence
• No residual value liability
• Preserves working capital for other purposes
• Off balance sheet reporting
• Opportunity to purchase after contract ends
• Directors guarantees may not be required
Main features of Photocopier Purchase (Cash)
• Reduces working capital
• Risk of owning an obsolete device
• On balance sheet reporting as an asset/liability
• Accounting maybe more complex - depreciation of asset
• No residual value liability
• Upgrades or add-ons to be paid for - reduces working capital
A good way is to conduct a cost vs. benefit analysis. This will ensure that the benefit you get from a photocopier will provide an adequate return on investment. For office copiers, the equipment itself does not actually generate revenue, and so it is more difficult to measure. One of the main benefits usually is the ability to do copying and printing in-house, rather than paying for it at a print/copy shop. Depending on the volume of copying & printing done, there is often a break-even point for a business where purchasing a photocopier for in-house copying, printing, scanning etc. will be more cost-effective.
Most businesses rent or lease their photocopiers. The main reason for that is that no capital is being tied up and instead can be utilise for other purposes. Additionally, because copier technology progess quickly, finance methods such as renting provides an easy upgrade alternative.
Renting or leasing costs more in the long run for products which are financed. They do become a competitive option that must be consider seriously. Be meticulous with rental or lease agreements which include the service component of the copier or multifunction device and charge of the combined rental and maintenance cost on a per-copy or per-print basis. It may look attractive overall, but complex 'contract' language around minimum volumes can disguise higher costs in the future. When financing a photocopier purchase, make sure that whichever method you decide is best for your business, and that you understand all the terms and conditions of the agreement.
Main features of Photocopier Lease
• Preserves working capital for other purposes
• Risk of owning an obsolete device
• Accounting maybe more complex - depreciation of asset
• On balance sheet reporting as an asset/liability
• Residual value liability
• Contract to be paid out in full prior to upgrade
• May involve early payout penalties
• Less flexible upgrade path if required during contract period
• Directors guarantees may be required
Main features of Photocopier Rental
• Ability to upgrade - reduces equipment obsolescence
• No residual value liability
• Preserves working capital for other purposes
• Off balance sheet reporting
• Opportunity to purchase after contract ends
• Directors guarantees may not be required
Main features of Photocopier Purchase (Cash)
• Reduces working capital
• Risk of owning an obsolete device
• On balance sheet reporting as an asset/liability
• Accounting maybe more complex - depreciation of asset
• No residual value liability
• Upgrades or add-ons to be paid for - reduces working capital