2826

Fixed Monthly Fee = No Cap Ex

Budgeting for capital expenditure or “Cap Ex” is essential for a business to operate and grow.

Capital expenditures are normally expenses a business or organisation makes to generate financial benefit over a period of years. Therefore, a capital expense is the cost of assets that have usefulness and can help a company create profits for a period longer than the current tax year. This distinguishes them from operating expenses for assets that are purchased and consumed, or used up, all within the same tax year.

 Capital expenditures represent substantial investments of cash, designed to show a return on investment over a period of years, it is important for companies to carefully plan for them. Nearly all companies budget separately for capital expenditures. Having a separate budget from operational expenses makes it simpler for companies to calculate the respective tax issues. For operational expenses deductions apply to the current tax year, but deductions for capital expenditures are spread out over a space of years and attract depreciation.

Taking the above into consideration there is much debate as to where “Two Way Radio Procurements” sit!

Capital Expenditure? or Operating Expenses?

2826 make these decisions for buyers very simple, whilst we are happy to work with all our clients to find the most suited solution operationally as well as a financing best match.  From recent experience and with the advent of political and financial uncertainty in the last 10 years or so, many organisations are looking for solutions that offer a fixed cost with no hidden unplanned or unbudgeted for expenses.  In these cases a Managed Service fee where the latest equipment, licencing and applications are all fully maintained and managed in one simple contract, billed monthly or quarterly to suit over an agreed period of time.

 

Managed Service Benefits

Key financial benefits:
  1. Fees 100% Tax Deductible
  2. No Capital Outlay
  3. Preserve Credit and Capital
  4. No Depreciating Asset
Key operational benefits:
  1. Upgrade Path avoiding Obsolescence
  2. Battery Replacement Program
  3. Immediate Repair/Replacement of Faulty Items
  4. Fully Maintained Service