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Business Phone Leasing vs. Buying

By: Scott Resnick


Business communication systems are extremely important for companies that want the ability to communicate effectively both inside and outside of the organization. To establish the proper business communication system, you need the right phones. Two popular options for business phones are buying and leasing.There are some benefits and drawbacks to both of these methods for obtaining the phones that your company needs for communication purposes.

Questions To Consider

The world of business communication systems has gotten increasingly more complex thanks to the development of VoIP and enterprise mobility. Some of the key issues to consider before you decide what kind of phone system you want include:

  1. What kinds of features do you want your phones to include? Some phone models have basic call functionality, while others have sophisticated conference call and call waiting systems. It is important to determine what features you can live without and what features you absolutely need.
  2. Do you want new or used phones? New phones generally have more sophisticated technology, but used phones can work just as well at a lower price
  3. What kind of customer support comes with both options? You will want to have a support provider that you can turn to for any concerns about the function of your phones
  4. Does scalability matter to you? If your business will be expanding soon, you may need to upgrade your phone systems to support your growing staff
  5. What is your budget for a business phone system?
  6. How reliable is the phone system you are considering? If your phones often go down, it will negatively impact your company’s productivities
Leasing Business Phone Systems

Some of the advantages of deciding to lease your phones include:

  • Less upfront costs: because you are delaying the payment of the total cost of the phones, you do not need to have a large sum of cash available to buy phones. This can be important for businesses that are in their early stages but still need a substantial system of phones to succeed
  • Tax breaks: According to the SBA, when leasing you are allowed to deduct the monthly cost of the equipment, which reduces the overall amount of money that you spend on phones
  • More equipment flexibility: many companies that provide phone leasing also allow their customers to exchange their phones easily, which means that your company will always have access to the latest phone technology to help you operate at a high level. This also means your systems will be more scalable as your business grows.
  • Better residual value: leased phone systems often hold their value well since they often new at purchase, which makes it easier to repurpose your existing phone system when you are done
The main disadvantages of phone leasing are that you do not actually own the phones that you are leasing and you are often committed to paying your lease for a certain length of time, no matter what happens with your business or its communication needs.

Buying Business Phone Systems

The advantages of buying business phones are:

  • You own the phones: when you own your business phones they are considered an asset of the business and you are free to operate and repair them however you wish
  • Full tax benefits: when you buy phones, you can deduct the entire cost of the purchase in the first year so that you reduce the cost that your company has to pay
  • Greater selection of phones: when buying phones you can get them from anywhere, including Internet sources that are not geographically close to you. With leasing, you are limited to the type of phones that your provider has available
There are two big disadvantages of buying phones for your business communication systems. The first is that you are stuck with the kind of phone that you buy for a while: there is no easy option to trade in your phones for newer models if you need to repurpose or scale your system up or down. The second disadvantage is that you pay more upfront. This can be a big problem for businesses that need to keep a steady flow of cash coming in. Another disadvantage to buying phones is a smaller ROI, since phones that you buy hold less residual value and depreciate more quickly than leased phones as a result.

The Most Important Concern For Obtaining Phones

Whether you decide to buy or lease business phones, it is vital that you deal with a trustworthy provider. Your phone vendor should offer you flexible purchase or leasing terms, excellent prices, and quality customer service. Do the research needed to do business with this type of organization and you will have a much easier time setting up the proper business communication systems for your company.

This article was originally published by TTI Houston

Published: July 24, 2014

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Scott Resnick

Scott Resnick is the President and Owner of Today's Telecommunications Industries, LLC (TTI) in Houston, TX. For the past 39 years, Scott has been instrumental in serving the telecommunications needs of some of Houston's largest and most influential companies. TTI is one of the largest NEC dealers in the United States. Scott is an avid baseball fan, loving father, husband, and a world traveler.

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