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Leasing Is Less: Why Buying a Copier Doesn’t Make Sense

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If you own and run a small business, you know that financial resources are often slim at best. You are always on the lookout for ways to cut costs, to trim the fat. To make your company operate smoother and better, though, you also want to be at the cutting edge. One way to do this is through leasing instead of buying. Interestingly enough, one of the best office appliances to lease is a photocopier.

Leasing Is Lighter in Every Way

As CopySmart (http://www.copysmart.com.au/) points out, purchasing major appliances for your small business is a huge fiscal responsibility. It will stress your already strained budget even further. The stress only compounds when you consider that the product will depreciate over time. In a way, this means your investment does too. Looking for simple ways to mitigate this is one key to long-term financial success.

Consider the copy machine. Even as the world becomes more and more paperless, a printer is something every business will need. If you were to go out and buy a business copier, the price would be exorbitant. As William Lynch says, the upfront cost alone can “stretch operational budgets”. This is without even considering “supply costs and maintenance fees”.

There Are Four Hurdles

Lynch points out four obstacles to buying a copier, as well as how leasing is a much better alternative. The hurdles are capital, budgeting, taxes, and technology. Let’s consider each one in turn.

Many would argue that capital is the single most important “asset” that a company has in its arsenal. It is, of course, the thing that makes and keeps a company profitable. The higher your expenses are, the less capital you will have.

Copier Guide says leasing allows you “the use of a machine that you would otherwise not be able to afford”. This is because the lease breaks up the cost over time. As a result, you only pay a little bit at a time, not a big chunk of change all at once.

Budgeting acts in direct relation to capital, as do tax concerns. Your budget must reflect the amount of money you have now, and how much will you gain or lose in the future. When you buy a copy machine, you lose a lot up front, and you lose money over time because the machine depreciates. This affects both your budget and your tax liability. Here, Copier Guide is again a helpful resource. In a lease, “there is no need to record future lease payments as liabilities.”

Lynch echoes this sentiment. He says, “Copier leasing provides a distinct tax advantage over copier purchasing. If you buy a copier, you may only deduct the machine’s depreciation.” He also points out that “if you lease a copier…you can deduct the entire payment each time it’s made.” That’s pretty incredible. Leasing is already beginning to seem much more appealing than buying. And we aren’t even done yet!

The last factor to consider is that of the equipment itself. We all know that technology changes faster than you can buy it. Moore’s Law suggests processor machinery doubles in speed every two years. At this rate, you would need to buy a copier, at the very least, every other year to keep your small business current. That would drain your coffers and put a serious hurdle in the way of profits at the same time.

Lynch reminds us, “You would also need to get rid of the previous model, adding to your time expenditures.” So, not only would you be purchasing a new model, you’d have to dispose of the old one. The cost of time and money continues to grow.

By comparison, printer leases often allow you to upgrade at regular intervals. This takes care of the upfront price, the repurchasing cost, and the disposal expense, all at once!

Maintain, Maintain, Maintain

The four main hurdles aside, there is another obstacle that Copier Guide mentions. It may not be the most expensive, but it is without a doubt the most annoying and maddening. I’m talking, of course, about maintenance.

Maintenance is something that needs doing on a regular basis to any kind of machinery. A copier, used by so many people innumerable times throughout the day, is no different. In fact, they are one of a few office items that often experience a malfunction.

Copier Guide concurs: “Operating a sophisticated copier machine is no joke.” They point out that there are countless opportunities for the machinery to break down. As such, you will want to have some kind of service agreement in the event that it does.

Buying a warranty separate from the sale of the copier is possible. It can also be very expensive. By contrast, most leases include a service agreement by default. So, when the photocopier has a hiccup, which is almost inevitable, you can get it fixed quickly and easily.

Real-Life Experiences Favor Leasing

The above is all very helpful. It is also, in large part, theoretical. If you want some case studies, look no further.

Back in 2009, the University of Sydney decided to run an audit on their printing services. They determined that they could save about $11 million over five years by “centralising print services and by rationalising the current fleet of copiers”. It should be no surprise that they decided to go that route.

In a similar fashion, Western Sydney University provides its own centralized photocopying solutions for students. They supply all this “at a reasonable cost”. This price may not be possible if the university owned all the equipment.

As you can see, buying copiers outright is an exorbitant expense for any business. Whether large, small, or nonprofit, there is no great reason for owning copy machines. Leasing provides the same or better service, at a lower cost, and upgrades along the way. And lower taxes! Who wouldn’t love that?

The conclusion is clear and simple. If your company is in need of photocopying services, you should look no further than a good copier lease. It will get you exactly what you need when you need it, all without breaking the bank.

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