Wednesday, October 31, 2018

Does Leasing a POS System Make Sense?

Over the years I am asked from time to time whether it makes sense to lease a point of sale system versus making an outright purchase. Even the subscription style point of sale software programs may require new computer hardware that can run $3000 to $8000 for a typical retail store so you have to think about the following factors:
  1. What are the interest rates?
  2. Length of the lease?
  3. Are there potential tax write offs?
  4. Are you better off saving up for a POS system and making an outright purchase?
  5. Have you calculated a Return On Investment (ROI) based on putting in a new POS system?
  6. Have you created a budget for the POS system based on ROI?
  7. Who owns the equipment during the lease and at lease end?
  8. What about repairs for hardware before the lease is paid off?
  9. How much labor is part of the POS system? Some leasing companies put a cap on what percentage of the lease can be labor related.
It almost boils down to what works within your budget and mindset. Do you prefer to rent a house or lease a vehicle? Then leasing may be a good options for you.

Are you on a budget but see the value/ROI that a POS system offers?  Then leasing may be an option for you.

On the other hand, if you would rather not take on debt and prefer to own the equipment, then an outright purchase may be best for you.

Statistically, I have seen a decline in retailers wanting to lease equipment since around 2010. You have to look at your budget, future plans for growth, and similar factors like ROI to decide what is best for you and your business.

I would also caution against over buying. You need to stay within the same budget whether you lease or purchase outright.

Have questions on leasing versus buying a point of sale system? You can reach me at 208-340-5632 or for some general advice.

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