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IT Equipment Buy vs. Lease Decision

IT Equipment Buy vs. Lease Decision. Gary E. Carpenter, CPA Technology Assurance Committee New York Society of CPA’s Tuesday December 14, 2004. What Should We Look At In The Buy vs. Lease Decision?. What are the numbers What is the life of the asset Corporate policies Residual value

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IT Equipment Buy vs. Lease Decision

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  1. IT EquipmentBuy vs. Lease Decision Gary E. Carpenter, CPA Technology Assurance Committee New York Society of CPA’s Tuesday December 14, 2004

  2. What Should We Look At In The Buy vs. Lease Decision? • What are the numbers • What is the life of the asset • Corporate policies • Residual value • Upgrading • Technology • Cash and/or financing resources

  3. You Decide to Buy • How will you pay for the asset? • Identify the Economic and Corporate Life of the asset. • Plan on how you will dispose of the asset. • Plan your replacement/upgrade asset now.

  4. You Decide to LeaseNow What? • Work with a company you know and TRUST!!! • List what your needs are. • Do “what if” scenarios. • Have an exit plan at the end of the lease. • Beware of the low number.

  5. The Lease Ends,What do We do Now? • Know when the lease ends. • Make sure you know when the lease ends. • Then check again to see when the lease ends. • At least six months before the lease ends: • Decide if you want to keep the asset • Contact the lessor • Negotiate new contract or prepare to return the asset • If returning the asset what is your replacement plan

  6. We Made the Wrong Decision!! • If the asset was purchased: • What is wrong? • Technology • Asset • Impact on financial statements • Finances

  7. We Made the Wrong Decision!!(continued) • If the asset was leased: • What is wrong? • Technology • Asset • Impact on financial statements • Lease agreement • Residual value of the asset

  8. Cowboy Logic • Good judgment comes from experience, and a lot of that comes from bad judgment. • Never ask a barber if he thinks you need a haircut. • If you get to thinkin’ you’re a person of some influence, try orderin’ somebody else’s dog around. • Lettin’ the cat outta the bag is a whole lot easier ‘n puttin’ it back. • The quickest way to double your money is to fold it over and put it back in your pocket.

  9. Gary E. Carpenter, CPA Carpenter Information Technologies, Inc. P.O. Box 15278 Syracuse, NY 13215-0278 315/487-4567 * Fax 315/487-2663 E-mail: cit@twcny.rr.com

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