Should You Include Maintenance Plan Costs In Your Copier Lease?

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Recently I met with a prospective copier customer located here in Baltimore, Maryland.

The company is what I would consider a mid-sized manufacturing business with 200 employees.

They have 3 copiers and 3 large commercial color printers at their facility.

During our initial meeting I asked the CFO of the company how his billing was set up with his current copier vendor and he informed me that everything was included in his lease.

By everything he meant that the copiers, the printers and the maintenance agreement for all of them were all rolled into one lease.

Just to be clear, when I say maintenance agreement/plan I’m speaking of an agreement that covers toner, all service and repairs as well as preventative maintenance. Basically everything except paper and staples for the copiers and printers.

When I asked the CFO if he’d ever considered having the maintenance agreement billed separately from the lease he looked puzzled.

I explained to him that he was paying interest/leasing fees on the maintenance agreement and that he really didn’t have to do that.

I further explained that all copier companies will bill you separately for your maintenance agreement and that keeps you from paying leasing fees on your copier maintenance plan.

I told him that many copier companies don’t actually hold your lease in-house but instead send it to an outside company. In these cases the leasing company sends you the lease invoice each month for the lease and the copier company will send you the bill for the maintenance plan because they are the ones providing the maintenance.

Then what the CFO said next had me puzzled. He said he likes to keep the copiers, printers and maintenance together in the same lease so he doesn’t have to write 2 checks every month. Huh?

This business does a fairly significant amount of printing and copying so they are paying A LOT of money unnecessarily.

Unlike this CFO many businesses who have the cost of maintenance rolled into their copier lease don’t understand that they’re paying leasing fees on the copier maintenance agreement.

I’ve even had prospective customers tell me that the sales rep of their current vendor told them that there are no fees whatsoever associated with putting maintenance into the lease.

That sounds like a bunch of poo poo to me. There could be many reasons a copier salesperson is encouraging you to do this but my bet is that it benefits the salesperson to do so.

One possibility is that the copier company actually holds the lease in-house and by rolling maintenance plan costs into the lease they make increased profits on that maintenance. Therefore the copier company may be giving the sales rep an increased commission for putting the maintenance costs into the lease.

If the leasing company (whether in-house or not)  is allowing you to have maintenance costs rolled into your copier lease they are charging you for the privilege one way or another.

They are leasing companies, not charities. They didn’t get to be the incredibly profitable entities they are by lending money to businesses for free.

It seemed to me that this CFO was costing his company a boatload of money for the convenience of writing one check per month instead of two. Heck, most copier companies will bill you quarterly or even annually for maintenance so you really don’t even have to write a maintenance check every month.

My advice is to have your maintenance agreement billed separately to avoid unnecessary costs to your business.

If your business is located in Maryland, Washington DC, or Northern Virginia and you would like a competitive quote from a copier salesperson who will tell you the truth (even when it hurts), please fill out the quick easy form below and I would be glad to help.

If you are anywhere else in the United States and would like my recommendation for copier companies in your local area fill out the form below and I’ll get back to you asap.

As always you can also ask me any copier buying question you like and I’ll do my best to give you a solid answer.

Thanks for stopping by. Have fun.

Ed Worthington

 

 

 

 

How Small Businesses Can Save BIG Money on Copying & Printing Costs

Last week I received a call from a small professional services company located in Bethesda, Maryland. The bottom line of the call was that this company was struggling with declining revenues since 2008 due to the economic downturn and is looking to save money on their copying and printing costs.

My experience in the field tells me that they’re not alone. I seem to be getting more and more calls and emails from small business owners and executives with the same questions and concerns. The owners of these small businesses are feeling uncertain about the future and looking to save money wherever they can.

As a matter of fact, this company wasn’t just looking to save money, they needed to save money to stay in business.

They wanted to know if I could help. I could, and in a BIG way. I’ll explain how I did it in a moment but first here is some important background information.

There are approximately 28 million small businesses (under 500 employees) in America . Approximately 90% of these companies have 20 or less employees and about 96% have 50 employees or less. Chances are pretty good that if you’re reading this you’re one of them.

The bottom line is that there are a lot of  small businesses in America and many of them are unknowingly throwing money away every day by using very inefficient and expensive desktop printers and all-in-one (print,copy, scan, fax) desktop printers. I’m not talking about a few dollars here.  There is much more than that in play here.

I’ve been told by more than one business owner that they’ve always assumed because they have so few employees and do such a small amount of printing and copying that it wouldn’t be cost effective for them to purchase or lease a stand alone copier. That assumption is costing many of them thousands of dollars per year.

When I say thousands I mean that literally. No exaggeration. If that sounds like a lot of money that’s because it is. Especially for a small business.

Many businesses based on the assumptions I listed above go to Staples, Office Depot or go online and purchase multiple desktop printers and/or desktop all-in-one printers.

Although these desktop models are less expensive than a stand alone copier to purchase up front, in the long run they can be considerably more expensive to operate due to the high cost of their consumables such as toner, drums, ect.

It’s important to take a close look at the total cost of ownership of your current copying & printing equipment.

I designed The Copier Cost Comparison Worksheet to give businesses and professional practices like yours a way to assess the monthly cost of your current copier(s)/printer(s) to the cost to the cost of the solution that a prospective vendor is offering.

This worksheet is especially helpful for businesses that are using multiple desktop all-in-one machine like the popular Brother or HP models.

There are many variables that effect the overall costs of copiers and printers so you may have questions about your specific situation. When these questions arise feel free to call me directly or fill out the easy contact form at the bottom of this post.

1) How much do you spend on toner per month for all existing machines? Include all desktop printers and all-in-one printers.

__________

2) How much do you spend per year over the last several years replacing  fax machines, desktop printers and all-in-one devices?  (Divide annual amount by 12)

__________

3) Total Monthly Cost of Existing Copier/Document Management Process (Add lines 1 and 2)

__________

4) Proposed Monthly Investment for Stand Alone Copier (Lease Payment or Purchase Amount Divided by 60 Months)

__________

5) Proposed Monthly Investment for Service Plan on Stand Alone Copier

__________

6) New Monthly Investment for Stand Alone Copier (Add lines 4 and  5)

__________

7) Savings Per Month with Proposed Stand Alone Copier Solution (Subtract line 6 from line 3)

__________

8) Annual Savings with Proposed Stand Alone Copier Solution (Multiply line 7 by 12 months)

__________

9) Savings Over Full Lease Term with Proposed Stand Alone Copier Solution (Multiply line 7  by number of  months of lease term)

__________

Other Considerations:

In addition to the savings shown above, your office staff will now be much more efficient in their daily work. The time invested in repeated workflow processes will be dramatically reduced due to the unique features of a stand alone copier solution. There is a definite savings in cost of man hours due to this increase in office efficiency.

Additionally, if you currently receive a high volume of inbound faxes you can save additional revenues by using the stand alone copier as a fax machine. Each fax printed on a stand alone copier is far less expensive than that of a fax machine.

Also with a stand alone copier you don’t have to print every fax. You can have the faxes routed to an email inbox as a pdf document. Many businesses receive several pages of fax spam per day. You no longer have to pay for toner and paper to print out these advertisements. Just view and delete them right from the an email inbox.

These savings are in addition to the savings on this worksheet.

If your organization is located in the Baltimore, Washington DC, Northern Virginia metro area I’d be happy to perform a cost analysis to see if I can save you money. Chance are good that I can whether you have desktop equipment or stand alone copiers.

It never hurts to get a competitive quote to compare your current vendor to.

If you have any questions feel free to call me or fill out the easy contact form below. Have Fun!

Ed Worthington 443-570-0414

How to Cancel a Copier Lease- Sample Letter of Intent to Cancel Copier Lease

February 15, 2014 4 comments

Frustrated Man Worries About Economy Unpaid Bills

If you are leasing a copier for your business, professional practice or non-profit than your lease will no doubt have a specific term attached to it. A term simply means the length of the lease. Most copier lease terms are either 36, 48 or 60 months.

Most people believe that if they don’t want to keep the copier that the leasing company will contact them at the end of the lease and they can just send it back.

That’s where the mistake is made.

The leasing company usually will not contact you at the end of the lease and if you don’t send them a “letter of intent” to discontinue (cancel, terminate) the lease they will keep billing you the same monthly payment you’ve been from the beginning.

I’ve personally seen a real life case where a medical practice located in Westminster, Maryland (a suburb of Baltimore, Maryland) paid on their copier for an extra 4 years after the original lease ended.

With the amount of money they paid over the 7 years the could have literally bought 3 copiers. All because they failed to understand when their lease actually ended and what their responsibility was if they wanted to end the copier lease.

Whether you want to send the copier back at the end of the lease or you want to purchase the copier from the leasing company you must send them a letter of intent to terminate or purchase during the time widow specified in the lease you signed. That time window varies by leasing company but typically is something like, “no later than 60 days before the lease ends but no sooner than 120 days before the lease ends”.

You may be wondering why you have to send a letter of intent to terminate a copier lease if it ends on a specific date anyway. That’s because in the eyes of the leasing company the lease isn’t over until they receive your letter of intent within the specified time window.

It gets worse. With some leasing companies if they don’t receive your letter of intent in time they may not only keep billing you the same monthly payment but they may renew your lease for a full year.

So if you were to discover that your lease ended 3 months ago and you contact the leasing company thinking you can just end it now you’ll be in for a rude awakening. If you want to terminate the lease after this full year automatic renewal has happened than the leasing company will say, “no problem, you just have to buyout out the remaining months plus a few early termination fees to boot”.

To make this magical journey even more fun guess what happens if you were to forget to send in the letter of intent during the specified time window at the end of your one year automatic renewal? You guessed it, you get to spend another exciting  full year paying the wonderful leasing company.

The moral of this story is two-fold: 1) know when your copier lease ends and 2) send in your letter of intent during the time window specified by the leasing company or else you’ll regret it.

If your wondering what a letter of intent should say then click on the link below for a template. Just fill in your info and send it off. I would recommend certified mail. :)

Letter Of Intent To Terminate Lease

If your organization is located in the Baltimore, Maryland, Washington DC or Northern Virginia metro areas please contact me to receive a competitive quote about 6 months before your current lease ends. It never hurts to get a competitive quote. It tends to keep your current vendor honest.

My company carries Toshiba Copiers, HP & Lexmark Printers, Fujitsu Scanners and Dahle Professional Shredders.

In addition to the hardware listed above we provide software and services such as Managed Print Services, IT/Network Services and a full line of document management software.

If you have a general copier buying question or would like a free copy of my book, The Ultimate Copier Buying Guide, just fill out the form below. Thanks for stopping by. Come back often and most of all…… HAVE FUN!

Categories: Copier Leasing

Health Plan Company Settles with Health & Human Services (HHS) for $1.2 Million in Copier Hard Drive HIPPA Violation Case

January 22, 2014 Leave a comment

Under a settlement with the U.S. Department of Health and Human Services (HHS), Affinity Health Plan, Inc. based in Bronx, New York will settle potential violations of the HIPAA Privacy and Security Rules for $1,215,780.

The Office for Civil Rights’ (OCR) investigation indicated that Affinity impermissibly disclosed the protected health information of up to 344,579 individuals when it returned multiple photocopiers to a leasing agent without erasing the data contained on the copier hard drives.

In addition, the investigation revealed that Affinity failed to incorporate the electronic protected health information stored in copier’s hard drives in its analysis of risks and vulnerabilities as required by the Security Rule, and failed to implement policies and procedures when returning the hard drives to its leasing agents.

Bottom line, if you are a physician or health care provider make sure that your copier company is protecting you by following proper information security procedures namely wiping the hard drive or removing the hard drive before selling or leasing the copier to someone else.

Click the link below to see the CBS News report that opened up this case.

If you have questions about this post or any general copier buying questions fill out the form below or contact me, Ed Worthington, directly at 443-570-0414. Thanks for stopping by. Have a fun day.

Physicians & Healthcare Providers- Is Your Copier Company HIPAA Compliant? If Their Not, You’re At Risk!

December 22, 2013 Leave a comment

If you own or manage a physician or healthcare providers office it is VERY IMPORTANT that you fully understand new HIPPA regulations that took effect on September 23, 2013.

According to the head of the Office for Civil Rights (OCR) which is part of the Department of Health and Human Services (HHS) these are “the most sweeping changes to the HIPAA Privacy and Security Rules since they were first implemented.”

As a summary of the changes the American Medical Association (AMA) released the following statement:

“In general, the new rules expand the obligations of physicians and other health care providers to protect patients’ protected health information (PHI), extend these obligations to a host of other individuals and companies who, as  “Business Associates,” have access to PHI, and increase the penalties for violations of any of these obligations….”

So what does this have to do with your copier company? Actually a whole lot.

Companies that handle your patients PHI (also know as your “Business Associates”) are now obligated to comply with the Security and Breach Notification Rules. If they’re not, they’re putting you at risk.

Your Business Associate’s could include your copier vendor , your IT vendor, your shredding vendor, ect… Anyone who has access and handles your patients’ PHI.

So if you’re copier company isn’t complying with these new rules, you should seriously consider finding one that is.

To demonstrate what’s at stake for you, click on the following link to read about the Managed Care company that received a $1.2 million fine for a security breach where the copier company was partially at fault.

http://wp.me/p23icE-7nt

If you have any questions about the new HIPAA rules or any question about copier purchasing/leasing in general feel free to fill out the form below or contact me directly. Ed Worthington 443-570-0414

Copier Buying Tip- Keep the Future in Mind

November 13, 2013 Leave a comment

The purpose of this blog is to pretty straightforward. To save you time, money and pain when buying a copier for your business. professional practice or church. Whenever I see what seems like a buying mistake made by a business I try to bring it to you in hopes that you won’t repeat others mistakes.

Recently I was working with a customer in Baltimore who bought a copier from my company about 4 years. The customer bought the copier from someone else in the company so I was not the person who originally sold the customer this copier.

When I sat down with the customer and began to ask him some questions to get familiar with his business he expressed his dissatisfaction that the copier he has currently wasn’t keeping up with the needs of his business. He had recently began to experience some service issues with the copier and felt he had actually been “undersold” when he purchased the copier.

In other words he felt that the previous representative from my company that he worked with didn’t sell him a machine that was made for the high volumes he was printing and copying.

Upon further review of his account I realized that the original service agreement he signed 4 years ago was for 20,000 copies/prints per month and they were now doing over 80,000 per month.

I asked him if the company has grown over the last 4-5 years and he expressed that the growth has been significant. I explained to him that based on my research his volumes had increased significantly over that last 4+ years and that when he originally purchased the copier he himself felt that 20,000 copies/prints per month was sufficient.

It really wasn’t the previous salesperson’s fault. She thought she was doing the right thing at the time. The only mistake she may have made was to neglect to ask the customer about their growth expectations. At that point if the customer was anticipating rapid growth maybe higher volume model could have been recommended.

I quickly remedied the issue by recommending that the customer purchase either 2- 65 page per minute copiers or one 135 page per minute copier. Having 2- 65 page per minute copiers has some advantages over 1- 135 page per minute copier like the ability to have 2 people sending faxes at once.

In the end this customer opted for one copier but the moral of the story is when buying a new copier keep in mind that if you anticipate company growth you may want to go one or 2 models up from what you current needs warrant.

If you don’t, you may end up having service issues when the copier is being used more than the manufacturer recommends for that model.

Also keep in mind that manufacturers tend to exaggerate the number of monthly copies/prints their machines can reasonably handle without having service issues. Sometimes I get a good laugh when I read manufacturers brochures. I have no idea why they put such unrealistic numbers on these spec sheets but I find all manufacturers do it.

The other option is to keep in mind that you may have to expand your copier budget to purchase a second machine while you still have an active lease on the first one.

If you choose the two copier option keep in mind that you don’t want to wait until your first copier is having a lot of service issues to add the second one. By that time the first one may be burnt out and have to be replaced well before the lease ends. This would defeat the purpose of the strategy.

So the copier buying tip today is to keep future needs in mind when purchasing a new copier for your business.

Thanks for stopping by and reading. If you have any questions  or comments please feel free to fill out the form below.

Have fun!

Read more…

Copier Data Security: Prevent Copier Identity Theft: A Guide for Business

October 7, 2013 Leave a comment

One question that I constantly get from my clients is how to secure the sensitive data on their copier.

I recently discovered this guide online and I thought that it was great information.

Please read this carefully and apply it to your business as best you can.

Copier Data Security: A Guide for Businesses

Federal Trade Commission | business.ftc.gov

Does your company keep sensitive data — Social Security numbers, credit reports, account numbers, health records, or business secrets? If so, then you’ve probably instituted safeguards to protect that information, whether it’s stored in computers or on paper. That’s not only good business, but may be required by law.
According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, your information security plans also should cover the digital copiers your company uses. If the data on your copiers gets into the wrong hands, it could lead to fraud and identity theft.

Digital Copiers are Computers

Commercial copiers have come a long way. Today’s generation of networked multifunction devices — known as “digital copiers” — are “smart” machines that are used to copy, print, scan, fax and email documents. Digital copiers require hard disk drives to manage incoming jobs and workloads, and to increase the speed of production. But not every copier on the market is digital: generally, copiers intended for business have hard drives, while copiers intended for personal or home office use do not.
The hard drive in a digital copier stores data about the documents it copies, prints, scans, faxes or emails. If you don’t take steps to protect that data, it can be stolen from the hard drive, either by remote access or by extracting the data once the drive has been removed.
Digital copiers store different types of information in different ways. For example, photocopied images are more difficult to access directly from the hard drive than documents that are faxed, scanned or printed on the copier.

The Life-Cycle of a Copier

Copiers often are leased, returned, and then leased again or sold. It’s important to know how to secure data that may be retained on a copier hard drive, and what to do with a hard drive when you return a leased copier or dispose of one you own.
It’s wise to build in data security for each stage of your digital copier’s life-cycle: when you plan to acquire a device, when you buy or lease, while you use it, and when you turn it in or dispose of it.

Before you acquire a copier:

Make sure it’s included in your organization’s information security policies. Copiers should be managed and maintained by your organization’s IT staff. Employees who have expertise and responsibility for securing your computers and servers also should have responsibility for securing data stored on your digital copiers.

When you buy or lease a copier:

Evaluate your options for securing the data on the device. Most manufacturers offer data security features with their copiers, either as standard equipment or as optional add-on kits. Typically, these features involve encryption and overwriting.

Encryption is the scrambling of data using a secret code that can be read only by particular software. Digital copiers that offer encryption encode the data stored on the hard drive so that it cannot be retrieved even if the hard drive is removed from the machine.

Overwriting — also known as file wiping or shredding — changes the values of the bits on the disk that make up a file by overwriting existing data with random characters. By overwriting the disk space that the file occupied, its traces are removed, and the file can’t be reconstructed as easily.
Depending on the copier, the overwriting feature may allow a user to overwrite after every job run, periodically to clean out the memory, or on a preset schedule. Users may be able to set the number of times data is overwritten — generally, the more times the data is overwritten, the safer it is from being retrieved. However, for speed and convenience, some printers let you save documents (for example, a personnel leave slip) and print them straight from the printer hard drive without having to retrieve the file from your computer. For copiers that offer this feature, the memory is not overwritten with the rest of the memory. Users should be aware that these documents are still available.
Overwriting is different from deleting or reformatting. Deleting data or reformatting the hard drive doesn’t actually alter or remove the data, but rather alters how the hard drive finds the data and combines it to make files: The data remains and may be recovered through a variety of utility software programs.
Yet another layer of security that can be added involves the ability to lock the hard drives using a passcode; this means that the data is protected, even if the drive is removed from the machine.
Finally, think ahead to how you will dispose of the data that accumulates on the copier over time. Check that your lease contract or purchase agreement states that your company will retain ownership of all hard drives at end-of-life, or that the company providing the copier will overwrite the hard drive.

When you use the copier:

Take advantage of all its security features. Securely overwrite the entire hard drive at least once a month.
If your current device doesn’t have security features, think about how you will integrate the next device you lease or purchase into your information security plans. Plan now for how you will dispose of the copier securely. For example, you may want to consider placing a sticker or placard on the machine that says: “Warning: this copier uses a hard drive that must be physically destroyed before turn-in or disposal.” This will inform users of the security issues, and remind them of the appropriate procedures when the machine reaches the end of its usable life.
In addition, your organization’s IT staff should make sure digital copiers connected to your network are securely integrated. Just like computers and servers that store sensitive information, networked copiers should be protected against outside intrusions and attacks.

When you finish using the copier:

Check with the manufacturer, dealer, or servicing company for options on securing the hard drive. The company may offer services that will remove the hard drive and return it to you, so you can keep it, dispose of it, or destroy it yourself. Others may overwrite the hard drive for you. Typically, these services involve an additional fee, though you may be able to negotiate for a lower cost if you are leasing or buying a new machine.

One cautionary note about removing a hard drive from a di gital copier on your own: hard drives in digital copiers often include required firmware that enables the device to operate. Removingand destroying the hard drive without being able to replace the firmware can render the machine inoperable, which may present problems if you lease the device. Also, hard drives aren’t always easy to find, and some devices may have more than one. Generally, it is advisable to work with skilled technicians rather than to remove the hard drive on your own.

For More Information

To learn more about securing sensitive data, in general, read Protecting Personal Information: A Guide for Business at ftc.gov/infosecurity.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair practices in the marketplace and to provide information to businesses to help them comply with the law. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
Opportunity to Comment
The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from small businesses about federal compliance and enforcement activities. Each year, the Ombudsman evaluates the conduct of these activities and rates each agency’s responsiveness to small businesses. Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 1-888-REGFAIR (1-888-734-3247) or go to sba.gov/ombudsman.
Protecting Sensitive Information: Your Legal Responsibility
The FTC’s standard for information security recognizes that businesses have a variety of needs and emphasizes flexibility: Companies must maintain reasonable procedures to protect sensitive information. Whether your security practices are reasonable depends on the nature and size of your business, the types of information you have, the security tools available to you based on your resources, and the risks you are likely to face.
Depending on the information your business stores, transmits, or receives, you also may have more specific compliance obligations. For example, if you receive consumer information, like credit reports or employee background screens, you may be required to follow the Disposal Rule, which requires a company to properly dispose of any such information stored on its digital copier, just as it would properly dispose of paper information or information stored on computers. Similarly, financial institutions may be required to follow the Gramm-Leach-Bliley Safeguards Rule, which requires a security plan to protect the confidentiality and integrity of personal consumer information, including information stored on digital copiers.
business.ftc.gov

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