15 Critical Success Factors
for your equipment leasing program
Equipment leasing, when managed effectively, can offer a number of strategic financial and competitive benefits to your business. Leasing enables better use of cash flow and offers more budget flexibility. Additionally, leasing can provide a competitive advantage through faster refresh of technology. Arming your employees with the latest IT, material handling or manufacturing technologies can provide a productivity boost.
But the equipment lease lifecycle is inherently challenging to manage.
That’s why companies choose lease lifecycle automation platforms to manage the process from end-to-end. The right software platform takes out the cost and risk of staying compliant so you can focus on the cash flow benefits of leasing.
But the equipment lease lifecycle is inherently challenging to manage.
That’s why companies choose lease lifecycle automation platforms to manage the process from end-to-end. The right software platform takes out the cost and risk of staying compliant so you can focus on the cash flow benefits of leasing.
There are at least 40 required lease attributes to track and leases can be almost anywhere across an organization. And then there are the evolving standards to manage.
Make leasing easier
For over a decade, LeaseAccelerator has helped some of the world’s largest companies get the most out of highly-decentralized, complex leasing programs. During our engagements we have identified a set of 15 critical success factors that best-in-class companies use to manage their equipment leasing program. Some of these critical factors start before the lease is even executed during the sourcing and contracting phase, while others relate to the end-of-term such as lessor notification and reverse logistics. In the pages that follow we will share our recommendations on best practices and critical success factors.
#1 Conduct lease versus buy analysis
Require a lease versus buy decision to be conducted for each new equipment lease under consideration. A key to success will be making the process un-intimidating for non-financial users. Consider offering an easy-to-use tool for non-financial stakeholders to request an analysis. The analysis should be centrally controlled to ensure that the latest market rates and financial variables (e.g. WACC, IBR) are being used.
Standardization of the lease versus buy analysis will not only ensure that your company always makes the best economic decision, but it will keep you out of trouble during Sarbanes Oxley audits. Auditors will be able to determine that adequate procedures and controls are in place.
Standardization of the lease versus buy analysis will not only ensure that your company always makes the best economic decision, but it will keep you out of trouble during Sarbanes Oxley audits. Auditors will be able to determine that adequate procedures and controls are in place.
#2 Source leases competitively
Put equipment financing out to bid to ensure that you get the most competitive financing rates and contract terms. Generate an RFP with requirements such as the lease term, currency and end-of-term options you are seeking. Distribute the RFP to your preferred lessors or a competitive marketplace of banks, vendor captives and independent leasing companies.
Get the eBook
Download the full eBook now to access all 15 of the critical success factors that best-in-class companies use to manage their leasing programs.