In a prior blog post, we’ve discussed a common need for a retailer to establish a proven ROI model to justify the expenditure of a smart safe. And, with larger rollouts, the more pronounced this need becomes.
However, even with a solid ROI model, the upfront capital expenditure of several smarts safes may be a tough pill to swallow for some organizations. Fortunately, for anyone facing this predicament, there is another option – leasing.
Leasing – a Quick Overview
Leasing is a well-established method of financing used to acquire a wide range of capital equipment to help run a business. Virtually any type of equipment that is used in a business can be leased, from personal computers to airplanes, ranging in value from a few thousand dollars to millions of dollars.
With a lease, a customer can spread the cost of the equipment over a period of time, negating the need to dispense with a large cash outlay when acquiring the equipment.
Benefits of Leasing a Smart Safe
A smart safe is designed to improve the security, traceability, and auditability of cash deposits. These benefits can be easily quantified as part of an ROI analysis. When a smart safe is leased, many of these benefits can be soon realized once the unit is deployed.
The following are three advantages of utilizing leasing as a means to acquire smart safes:
Immediate ROI Return
Leasing a smart safe enables organizations to realize an immediate return on their investment from the day that the equipment is up and running. Due the significant savings a smart safe provides (more efficient use of labor, reduced cash losses due to theft or shrink, minimized reconciliation efforts), organizations can pay for their smart safes from the cost savings they generate once they are installed in their business.
Increased Working Capital
If a retailer acquires a smart safe using its cash, the money it has invested gets tied up in a depreciating asset. This means that money cannot be used for other projects, purposes or the unexpected. If a lease is utilized to acquire the equipment, it will allow an organization to use its money to respond to unforeseen problems, make the most of new sales opportunities, or invest in new product development and marketing.
Better Predictability of Cash Flow
When leasing a smart safe, payments are fixed at the same level for the period of the lease. Unlike with a loan from a bank, if interest rates change, lease payments will stay the same. This allows a retailer to budget cash flow more effectively. In addition, lease payments are an allowable business expense, so all of the rentals could be deducted from taxable profits. A retailer will find itself in an envious position by reducing its tax bill and improving its cash flow at the same time.
Summary
Leasing has been around for years, and it has helped numerous businesses acquire the capital equipment they need to run their business. Leasing a smart safe offers a relatively unique scenario. The tangible benefits a smart safe provides can be immediately realized once the smart safe is deployed, enabling the payback period to be essentially zero, or even negative. Rarely does this occur in a business, and those organizations that take advantage of such a scenario can better position themselves to grow and succeed in a dynamic, and competitive, retail environment.
If you would like to learn more about Tidel’s lease offerings for its cash management systems, please email [email protected] or call 1-800-678-7577.