Businesses, private and public, have started to see the many benefits of self-service solutions. While self-service initiatives provide significant ROI opportunities, businesses should understand all of the necessary costs and how they plan to fit those costs within their current budget before moving forward. To help businesses prepare for kiosk and self-checkout purchases, we answered the most frequently asked questions about financing self-service solutions.
Self-service initiatives are an investment in the company’s future. What percentage of the total cost should buyers be prepared to pay upfront?
For new customers, first orders typically require a 50 percent deposit unless it’s a government entity. The 50 percent deposit allows the manufacturer to be more responsive to customers specific needs. Nearly every kiosk has some element of customization; therefore, most manufacturers don’t hold large volumes of component inventory. Since every enclosure is built to order, the deposit allows manufacturers to buy the peripherals for each order. This lowers overall costs and allows the manufacturer to pass the savings to their customers.
Self-service solutions range dramatically in price based on a number of factors. Are there extra expenses that buyers should be prepared to pay (e.g. shipping, installment, etc.)
Shipping and installation are rarely included in an initial quote. Shipping, of course, is always subject to change; so, many manufacturers will request a quote when the project is near close. Installation is not typically included unless specifically requested. Another fee that is worth considering is field support for the kiosk deployment. Customers should inquire about a Service Level Agreement (SLA) if this is necessary. There are multiple options when it comes to supporting kiosks post deployment. Additionally, software license renewals should always be considered. Most software is either sold as a Client Assigned License (CAL), which will require annual maintenance (usually 20 percent of the licensing fee), or Software as a Service (SaaS), which will need to be renewed annually at its full amount.
What is the advantage for the company to buy an self service solution with prompt payment?
If the company has available capital that allows payment in advance or cash, the main advantage is getting a good discount on the purchase. The discount is often higher than the
The discount is often higher than the financial return of this discount if it’s applied in a bank institution. This discount is possible because the manufacturer will have a financil advance in their cash flow and this allow to pass a discount on the total of the purchase.
Depending on the company’s size, billing responsibilities are assigned to a single finance officer or an entire accounting department. What are the benefits, if any, for a company to pay Net 30?
The benefit of paying net terms is that a company can defer payment for that amount of time. This will free up working capital and allow companies to manage cash flow accordingly. On the flip side, it may not be the best arrangement for the vendor. Terms are a privilege and are typically granted to companies who are consistent in paying on time.
If a company wants to invest in a self-service solution but is unable to pay the required amount upfront, which steps should the company take in order to finance the initiative?
If funding a project is an issue, companies can always bring in a third party to finance the project. There are a number of capital finance companies willing to put up the money in return for earned interest. These can be lease programs or finance purchase programs with multiple term options. Companies that go this route should be prepared for background and credit inquiries as well as possible requests for collateral. All deals and projects will be different.
In addition to the hardware purchase there are extra costs in acquiring a self-service solution. Which ones are included in the supply of solutions provided by Schalter?
- The freight is FOB (Industry in Porto Alegre, RS), on the acquirer account, therefore the carrier must be indicated;
- The basic installation is included in all solutions. It includes the unpacking and testing of the new equipment and applications (software) purchased from Schalter. It’s not included and it’s acquirer’s responsibility the supply of the logical and electrical network;
- The applications and license to uso softwares and operational systems cost are offered and billed as separate items in the invoice;
Can Schalter offer its self-service solution with the freight included?
It’s possible, but the freight can’t be charged separate from the product. Schalter doesn’t have its purpose and function of an carrier, in this case the amount is added in to the total price of the product.
The disadvantage its a higher freight cost because it’s taxed with the products taxes.
Can the hardware and the software(s) of the self-service solution be discriminated as one only item in the invoice?
It’s possible but not recommended because the following reasons:
- It’s easier to control the contracted period of the application if it’s separate in the invoice;
- The taxes over the software are much lower than on hardware. Therefore, with only one item discriminated, the final cost will be much higher because its taxed as a hardware.
What are Schalter's standard payment terms?
A 30% entry with the order confirmation and settlement in 10 days after invoicing, but depending on the project, especially the volume of the solution being purchased, the conditions are negotiated on a case-by-case basis.
Does Schalter offer any financing conditions?
Yes, Schalter through IBM may offer the condition of payment by Leasing.
What is the advantage of Leasing offered x Bank financing?
Financing: the customer receives resources from a company for the purchase of a particular product. The property acquired is owned by the client and can not be released as an operating expense and, therefore, making it impossible to deduct income tax.
Leasing: the customer receives the intended good and not only the resource for their acquisition. Unlike the financing, the property continues under the property of the leasing company throughout the contractual period, which allows its deduction of income tax.
Is there any other marketing format that Schalter offers?
Schalter also provides its hardware solutions in the rental format, this offer depends on some requirements evaluated by Schalter and furthermore if Schalter has available capital to this investment in the moment that project is presented.
What are the advantages of Leasing vs. Acquisition?
During the contract period, the products are in the name of the Leasing company and are not part of the client’s assets, enabling a full deduction in taxes for the rental service value and on the CSSL (Social Contribution on Profits). Moreover, renting does not constitute a debt in the company’s balance sheet, and so, the main financial indicators used by the market analysts (debt/liquidity) remain intact, making it easier to obtain future credit in the market.
The acquisition doesn’t include any of the benefits mentioned above because the product are in the name of the acquirer and there’s a meaningful value lost in the moment of exchange and technological replacement.
What are the advantages of Location vs. Acquisition?
Location has the same advantages of leasing (Tax deduction and doesn’t constitute as a debt), besides that has the following advantages:
- Facilitated Exchange/Upgrade: Over the course of the contract period, the client can request an upgrade or change the equipment, with the costs of this operation and of the new products rented being integrated to the new contract and paid in installments;
- Costs of transport are on Schalter;
- Warranty and support included ON SITE during the contract period, on the acquisition the warranty and support ON SITE its only of one year.
What are the advantages of Location vs. Leasing?
The main advatege of the location over the leasing is the direct service contract with the manufacturer (Schalter), with all the support and technical assistance ON SITE during the contract period.
In the leasing case after the first year, warranty time, there will be additional costs of technical assistance per call or even the need to contract a new additional contract of technical assistance.
Quero mais informações!
Palavras-chave:Terminal de autoatendimento, Totem de autoatendimento, Autoatendimento, Autosserviço, Inovação, Tecnologia, Self Service, Kiosk, Touch Screen, Locação, Leasing.