The procurement of material handling equipment is a key decision made by operations managers and procurement managers as they work toward the success of their businesses. There is quite a bit to consider, including what forklift to acquire based on specific needs in your facility, the manufacturer that can provide you the best product and service, and, of significant importance, how the equipment acquirement fits into your budget.
Though there are several factors that can influence the decision of how to acquire forklifts, procurement managers often discover that leasing their material handling equipment provides a better ROI than purchasing via cash. If you are a traditional cash customer who has just arrived at the decision to lease during your next equipment procurement cycle, you can expect some changes, many of which will end up positively affecting your business. Here is some insight into what you can expect when transitioning to forklift leasing:
You Need to be Committed in your transition from purchasing to leasing forklifts:
Unlike paying cash for your equipment, leasing carries with it certain commitments that cannot be changed. While you are empowered to eventually sell any equipment you obtained via a cash purchase, leasing commits you to the equipment for the entire term of the lease. For procurement managers who are old hands at running their operation, this should not be a cause for concern. You know what you need, for how long, and how your equipment operators generally treat the forklifts. But for a manager who is overseeing an operation with changing needs, this means it is important that you thoroughly evaluate your own business needs and the capability of the forklift you are acquiring. Do not worry. Just be sure to ask your Toyota Dealer thorough questions and make sure they answer them to your satisfaction before committing to the lease.
Your Reporting will be Different when you transition from purchasing to leasing forklifts:
When you purchase a forklift, you own it and that means you report the equipment both as an asset and as a liability, and it may be depreciated over time. When you lease your material handling equipment, you do not have the responsibility of ownership and the monthly lease payment may be reported as an operating expense.
Leasing And Off Balance Sheet Reporting
Leasing affords the opportunity for off balance sheet financing. This gives you the flexibility to maintain your financial covenants while still obtaining the equipment you need to ensure the overall success of your operation.
Making the transition to leasing your forklift fleet can lead to a great deal of success for many different businesses. No matter what kind of lease you decide, please remember that changes are coming and those who are prepared will realize a seamless transition while keeping their business on track for success!