Companies of all sized face this decision all the time. Large companies may differ from small companies budget wise but both will have to make the decision. What will cost more up front? What will cost more in the long run? What will fit your company and your budget? Can I write this off on my taxes? These are all good questions; here are some things to keep in mind when you need to make large office purchases even if you are just updating your office machines:
- How much do you print? How much do you print per month? When it comes to copiers, scanners, printers and multifunctioning machines you will need to have a very good idea on the number of pages your company prints per month. Keeping an eye on your printing not only helps you see any misuse of office supplies but also helps you see if you print enough to buy. There is no hard number to say if you print enough for a purchase but a good rule to follow is if you print less then 700 pages a month it may be affordable to just use a medium size desk top machine. If you plan on doing more then 700 a month it would be best for you to lease a machine.
- What kind of budget do you have? When purchasing a larger office machine you will need a large amount of money up front. This is why leasing tends to be a more attractive option to smaller businesses. When you lease these printers or multifunctioning printers you can afford to have the best on the market without spending your entire budget.
- Do you want to write this off on your taxes? If you decide to purchase outright, you can claim 40% of the purchase price on your next year’s taxes and 25% of the balance after that. If you decide to lease, you can claim your monthly lease payment as an expense. This leads to a better tax break for most businesses.
- Is it important to your business to keep up with technology? This is one of the biggest benefits of leasing; you have the option of leasing the newest products out on the market without buying outright every time. Technology moves fast, if your company needs to stay up to date leasing is the most cost effective way.
- Can you fix your own equipment or have the budget to hire someone? Things happen, error signs pop up, and things break down. When you decide to own your office equipment you better be ready to fix it yourself or budget to call in a service provider. When you lease equipment, you are covered for all problems and accidents. The company that leases out the equipment will come in and do all updates and troubleshooting; these companies have a staff dedicated to troubleshooting.
After answering these questions it should be very clear if your business should buy or lease. If you decide to lease, always read the fine print on the contract and don’t be afraid to ask questions.