What are the benefits of leasing Business Telephone Systems Equipment?

What are the benefits of leasing Telephone System Equipment?  In Sheffield and across the UK, businesses are feeling the pinch of the economic crisis with all manner of business expenses to contend with.  Added to this, the spend in all of these categories are constantly increasing.  Increased costs are apparent in all different aspects of the business, from Gas and Electricity, through to Vehicle costs and others.  Telephony equipment is one such category that is relatively high cost as the cost of equipment is relatively high and when you add to that the ongoing costs associated with Telecoms, it can be difficult to find the cash to purchase the Telephone System and handsets outright.  Our preferred solution to this problem for our customers is to lease the equipment. Leasing a business telephone system offers a multitude of advantages for businesses looking to acquire the latest technology without the burden of a large upfront cost. ESP (based in Sheffield) have assisted many customers with using leasing to help their organisation to achieve things that might have been unachievable simply by using their own cash. By spreading the cost of a new phone system over a lease period, businesses can manage their finances more effectively, avoiding the strain of a substantial initial investment. Additionally, manageable monthly payments provide financial flexibility, allowing businesses to budget and plan for expenses over time. Below we explore some of the benefits of leasing telephony equipment.  Business Magazine has a great article about the benefits of Equipment Leasing here – Business Magazine.

Key Features of Leasing 

Leasing offers a multitude of advantages for businesses looking to acquire the latest technology without the burden of a large upfront cost. One of the most significant benefits is the ability to finance telecoms and IT equipment, including business telephone systems, in a way that aligns with your cash flow and budget. By spreading the cost of a new phone system over a lease period, businesses can manage their finances more effectively, avoiding the strain of a substantial initial investment. 

Leasing options are highly flexible and can be tailored to meet the specific needs of your business. Whether you require a short-term lease or a longer-term agreement, the terms can be adjusted to suit your operational requirements. This flexibility extends to the ability to upgrade or replace your phone system as needed, ensuring that your business always has access to the latest technology without the need for a large upfront cost. 

Another key feature of leasing is the potential for tax relief. Lease payments can often be offset against operational expenses, providing a financial benefit that can reduce your overall tax liability. This makes leasing not only a practical choice but also a cost-effective one. 

In summary, leasing provides a way to acquire the latest business telephone systems without the financial strain of an outright purchase. It offers flexibility, financial benefits, and the ability to keep your technology up-to-date, making it an attractive option for businesses of all sizes. 

Cashflow stays healthy

It might be the thing that you are most likely to already understand, but quite often, this is the benefit with the biggest impact to a business.  When obtaining telephony equipment, especially when there’s a lot of equipment that’s needed all at once, it might harm the business from a cashflow perspective – having to pay a lump-sum up front.  When you are implementing a new telephone system, that rings true – you need to replace all of the equipment in one go – it’s not usually possible to replace it bit-by-bit. Compared to leasing, a cash purchase may result in lower overall tax relief due to limited capital allowances on the purchased equipment.

Leasing offers an alternative to the lump-sum up front approach, where you can still get the equipment, but you haven’t had to pay a chunk of cash up front.  It can help to balance the books or reduce your perceived spending in a given financial year, because the costs are spread over a number of years.  Some key situations where leasing can help with cashflow, revolve around your business (or it’s processes) needing to change.  For example, if you were taking on a new premise / office location, you might need a new telephone system.  Another example would be Covid, businesses had to change very suddenly, their working practices, allowing staff to work from home.  Many telephone systems weren’t geared up to allow this type of arrangement and so they needed to be replaced.

Predictable lease payments and following best practices.

With telephone systems, sometimes, things can go wrong, and quickly and you might need to change equipment at a similar pace.  When leasing Telephony equipment, you can replace it sooner than you would have done, which means it is way less likely to go wrong.  Accounting best practices mean that replacing your telephony equipment every 4 years is the right thing to do, by the time 4 years comes around, the technology has usually moved forwards in some substantial way – for example adding conferencing and then video conferencing and so on.  Also, after 4 years, the equipment disappears from the balance sheet and loses it’s value as an asset to your organisation.

Simpler equipment upgrading to the latest technology

Leasing can be an important tool to ensure that you keep new equipment coming into the business, within the parameters of best practice.  Leasing allows you to purchase kit, spread the cost over several years and to improve cashflow by doing so.  Telephony equipment leasing allows you to simply refresh your contract and the associated costs and then to obtain a load of replacement equipment, without necessarily substantially changing the amounts you are paying out on a regular basis, meaning you get to keep the predictable levels of spend, but also get to refresh the kit (including keeping ahead of the curve in terms of obtaining up-to date equipment that’s fit for purpose) and anything else, all at the same time.

Built in maintenance.

What are the benefits of leasing Telephone System Equipment?

With Telephone system equipment leasing, it’s usually possible to add a maintenance agreement into the lease to ensure that you have the peace of mind that if your equipment does happen to break down during the term of your lease it will get replaced in an efficient manner.  Talk to your provider to find out whether this is included in your agreement or not.

Tax and finance benefits.

Leasing can bring about various financial benefits to your business.  The most obvious is that the cost of a lease is almost always 100% tax deductible because it’s an operational finance cost, meaning a reduction in that pesky corporation tax, where it applies!  Whereas when purchasing the equipment outright. Compared to leasing, a cash purchase may result in lower overall tax relief due to limited capital allowances on the purchased equipment.  It is also usually easier to obtain a lease agreement than other forms of finance for businesses, so always worth investigating, even if you are a new business.  Always consultant your accountant or other advisor to find out how leasing might impact your finances.

Summary

Leasing telephony equipment clearly provides multiple benefits for your organisation, and these should be taken advantage of wherever possible. Most significantly it allows you to adapt quickly to changes in requirements and is ultimately much more cost effective and attractive to most businesses.

If you have any queries about how leasing might be usable in your organisation or would like to discuss your needs with regard leasing Telephony equipment please don’t hesitate to get in touch using our Contact page.