In the late 1960s, Xerox transformed the commercial world with the launch of the first commercially viable photocopiers. Through the rest of the 21st century, the photocopier became a staple part of every office.
Since then, times have changed. Photocopiers are expected to print and scan too. Technology has improved, and new features mean that updated models are rolled out with impressive regularity. Customer’s expectations have changed too. These days we expect higher quality printing, faster.
Data security is a key focus for many organisations handling personally identifiable information.
And many businesses look for all the help they can get when reducing their carbon footprint, so the environmental status of a photocopier has also jumped in significance for those looking for a photocopier.
There are so many things to consider when investing in a photocopier, the fundamental question of whether to lease or buy often gets overlooked. So, which should you opt for?
To lease or to buy?
These days more and more people are choosing to lease – cars, homes, equipment. By leasing equipment, you can take possession of it and use it as you would when purchasing outright, but payment is made in installments. By breaking payment down into regular, bite-sized chunks, the capital needed isn’t as intimidating. There are plenty of other benefits to leasing equipment rather than buying equipment and machinery.
Photocopier lease agreements are very similar to rental agreements. Like rental agreements, installments are paid for the use of the equipment. However, unlike rental agreements, a lease usually gives a set amount of time that the agreement and the repayments continue. In comparison, a rental agreement is usually a rolling agreement that ends only when one company notifies the other.
The pros and cons of buying
Buying a photocopier means you own the device from day one. You have complete control and can choose to upgrade it whenever you want (budgets allowing of course).
One initial payment is all you need to plan for. Most equipment tends to be fairly reliable, so it can mean that years go by with minimal outlay. There are no interest charges or fees to pay during the lifetime of the machine and you don’t have to give it back to the owner at the end of the lease period.
In today’s dynamic work environment, you’ll need more than simply a photocopying capability. Finding a reliable model that can print, scan and copy means that the upfront cost can be prohibitive.
You could find yourself saddled with outdated technology for longer than you’d like. Technology changes all the time, and the needs of your business will change too. As you’re likely to need to change your photocopier every 2-3 years as technology advancements are made, you may find your ROI falls through the floor.
The benefits and drawbacks of leasing
Traditionally, people tended to be more adverse to leasing equipment. Back in the 1980s, the number of companies buying or leasing devices was probably equally split, but today more than 80% of businesses lease their copiers.
Technology, inflation, and consumerism mean that it often makes more sense in today’s economy to lease rather than to purchase equipment outright.
Good reasons to lease include:
There’s a lower upfront cost and you can take delivery almost immediately. This means leasing is convenient from a cash flow and capital outlay perspective and finance leases are treated as a fixed asset.
Service agreements can be easily taken out which removes the responsibility of call-out charges and replacement parts from the leasing company.
With a lease copier or printer, you can simply budget a relatively small amount for the copier and upgrade it every few years as technology progresses, so you waste less money and can have confidence that your office will always have a device that can meet its needs.
Leasing a copier means your payments are considered a pre-tax expense which you can deduct from your taxes. When buying a device you can only deduct depreciation, and copiers depreciate by around 40% in the first year and 25% in the second.
Flexible leasing services such as ASL Flex mean that you can scale your copying demands up as your business needs change. With ASL Flex you can reduce or increase your photocopying fleet within predetermined levels to meet your needs.
But there are some drawbacks to sourcing your photocopier this way:
Whilst leasing isn’t technically a debt, you will be bound to the terms of the lease and some people consider an agreement of this sort to be similar to operating with a debt, which some business owners prefer to avoid.
A lease isn’t always a good solution for every business. For a new or existing business worried about long-term survival, leasing will mean you’re tied into a contract that could be difficult to get out of in the event the business needs change or cutbacks are required.
A lease only makes financial sense if you make 500+ copies a month. For smaller businesses or those that don’t use copiers often, a lease agreement can be uneconomic.
What to look for in your lease
Lease copier terms generally run from anywhere between 12 and 60 months, but 36 months is a typical agreement length and makes sense for most organisations.
Before approaching a lease provider, work out your copy volume. The cost of your lease will likely be linked to your usage, so having a clear idea of your expected use will give you a clearer idea of the financial commitment you’re making. Lease copier contracts tend to vary from 5,000 pages to 50,000 pages.
Consider the features you need. Will you require duplex printing and automatic document feeding? Do you need a stapling and hole-punching feature? Most offices will also need scanning, faxing and email capabilities.
With flexible service agreements, leasing is more flexible than ever and, at a time when businesses are huge changes in demand, operational processes and workforce requirements, this flexibility is essential for organisations to meet the expectations of their customers.
The ability to tailor the terms and features of your agreement precisely to your budget and operational needs means that the financial benefits of leasing and the flexibility it offers, for most businesses, far outweighs any concerns that businesses may have about leasing their equipment. Read more about ASL Flex here.