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Is Your Copier Contract On AutoPilot?

Posted by Kirk Studebaker // President | Jul 29, 2021 2:33:06 PM

When buyers go through the process of acquiring copy and print equipment for their office, they are diligent, to say the least. In many cases, it comes down to fractions of a cent per page between vendors. IT can be a blood bath. But then, once the contract is awarded it is far too common to let it go into autopilot. There are even contracts out there that encourage this, namely one rate or no volume contracts. I'll address this later.

Once the contract is in place, bills begin to go to a different department than the one who negotiated the contract, so it is not necessarily known what the bill should look like and it ends up just getting paid. However, there are common things that we see on invoices that are avoidable and expensive.

 

What to do About Insurance Policies?

The first is insurance. If you lease your equipment, which 98% of the market does, you have to name the leasing company as a loss payee on your policy based on the value of the contract (stream of payments). This allows the contract to be paid off directly to the leasing company if a loss should occur. The ONLY time I would encourage a customer to carry this coverage would be if they are in an area that floods are possible and they don’t have flood insurance. Even then, I would suggest weighing the premium against the coverage. I have seen premiums that are as low as $5 or $6 per month and some over $100 per month. It really depends on the finance company and if they view these premiums as a profit center or a pass-through item. The last statistic I heard is that 70%+ of lessee's are paying these policies. Are you?

 

How's Your Print Volume?

The next thing I commonly see is contracts that are not being managed for volume. Print volumes are dropping...is your contract following suit? I should qualify that all print is not dropping and that you may in fact have growing volume in your business based on the nature of what you do. What is interesting to me about this is I get more calls about overages than I do about not hitting a minimum. The reality here is that those companies that pay overage pay less per page printed than those that don’t.

The last item I will call out in this article is estimated volumes. One of the biggest challenges that we face in this industry is getting meters on machines. And if we can't get a meter the billing system estimates based on historical information. If you have had a change in how you print, and you are basing an estimate on how you used to print…This could end badly.

I mentioned contracts designed to employ a “get it and forget it” mindset. We see them branded as One-Rate or meterless billing. These contracts are based on historical volumes and bank on you printing less. These “One-Rate” deals have a built-in escalator on the service portion of the contract so your payment increases (a very common practice in all types of contracts…old equipment costs more to service) as your volume drops, making the cost per impression extremely high as the contract ages.


In fairness, a company needs to collect a minimum amount of money to effectively service a machine. They/we have to pay people to take your call, triage the issue and dispatch another person to fix it. We have to have people that are there to assist with toner and other consumables as well as trainers available to help your run the equipment. The equipment is complex and capable and it takes a sophisticated service organization to take care of the user. That said, make sure you understand your bill and know exactly what charges you are paying and for what.

I have a competent team that is capable of listening to you, evaluating your situation, and making recommendations that often include staying the course.

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Topics: Document Management, IT & Network Services Management

Written by Kirk Studebaker // President

Kirk has been in the Office Technology sector for 20 years working in the dealer world focused on supporting sales teams. Having worked for Manufacturers and dealers as well as his own entrepreneurial ventures, Kirk is dedicated to the development of people in the sales profession.

Outside of work Kirk has a wife and two children and enjoys being outside whether hunting or horseback riding.