Should Doctor’s Offices Buy or Lease Office Equipment and Machines?
When it comes to office equipment, small businesses like doctor’s offices should consider a few factors when deciding whether to buy or lease office equipment and machines. Businesses can spend anywhere from $922 to over $1,100 annually in office supplies alone, so it’s no surprise why deciding on how to procure larger capital expenses for new office machines like computers, printers, copiers, medical equipment or exam tables is not a light decision to make. There isn’t a one-size-fits-all approach because not all doctor’s offices need the same types of office machines. However, there are a few items that are commonly found in doctor’s offices.
Common office machines and equipment for Doctor’s Offices
According to Verywellhealth.com, there are a number of equipment and technology products that a typical doctor’s office needs to operate, including:
- Medical equipment: This includes standard medical equipment such as exam tables, body weight scales and stethoscopes.
- Billing and coding: This ranges from medical coding books to electronic health record systems.
- Computer hardware and software: This includes everything from computers to appointment scheduling software.
- Communication systems: Standard equipment includes telephones, answering machines and even patient appointment reminder software.
- Other Equipment: This includes everything from copiers or printers, paper and break room supplies.
Office equipment in medical office settings also vary depending on the specialty and patients being served. Medical offices that have in-house labs need office machines such as dual label writers to increase bar code labeling and mailing efficiency with lab samples. Pediatric medical offices will need equipment such as growth chart software.
Because the lifespan and usage frequency of equipment also varies, this is where several medical office managers find themselves evaluating whether buying or leasing certain assets makes sense.
Pros and Cons of Buying Equipment for a Doctor’s Office
Medical office managers might decide to buy equipment for the following reasons. Buying your equipment outright means you get to decide what to do with it, including getting immediate help when repairs are needed. You don’t have to wait for a third party to send a service representative. Buying also means you can sell it later down the road and you might even be able to reap tax incentives for equipment depreciation depending on the type of equipment you purchase. Buying your office equipment gives you more control over your assets; however, there are a few drawbacks to consider.
Why You Shouldn’t Buy
Buying office machines can be quite costly in the short term. You not only have to make sure you have the funds upfront to purchase your equipment. It might take a few years of operating your practice and seeing patients before making back the money you used to purchase your equipment. Maintenance and upgrades also become your responsibility. These factors might lead one to think that leasing office equipment might be a better idea.
Pros and Cons of Leasing Your Medical Equipment and Office Machines
Leasing provides you with several benefits, especially if you’re frequently in need of upgrading your equipment. You’ll be able to update your equipment more often as you don’t have to go through the process of selling off your equipment. Leasing also allows you to pay in a method and timeline that makes the most sense for your operational needs.
For example, you might sign up for a three-year contract for several office machines, where you’ll have a set payment each month. You don’t have to come up with a major up-front funding source to get your equipment. Leasing also provides tax incentives, sometimes as much as 100% as a tax-deductible operating expense.
Why You Shouldn’t Lease
Leasing equipment doesn’t always make sense for doctor’s offices. It might not be necessary to lease a standard copier machine, as an example, because copiers are usually easily available and replaceable. The risk with leasing bigger dollar items that aren’t as available is that you might not get many choices in variety and you’re highly dependent on the leasing contract for things like service check-ups. You might also run into the issue of having to keep an obsolete office machine until the contract runs up. Leasing also means you pay more at the end because of accumulated interest.
How to Decide Whether to Buy or Lease Office Equipment
A few other factors might help you determine how you should procure your office equipment. The nature of the community your medical practice practice is serving might be one factor. For example, community health centers rely heavily on government funding and might not be able to lease certain office equipment if the funding terms don’t allow it.
Changing trends in the healthcare industry might also be a factor, albeit more in the long-term. If the technology used for certain medical procedures changes due to technological advances or even regulatory requirements, your medical office has to be able to react swiftly. According to news-medical.net, there are two issues to consider when medical equipment such as centrifuges starts to become obsolete:
- Maintenance costs
- Innovations in features and capabilities
Leasing might complicate your ability to quickly adapt to the changing industry if you’re stuck in a long-term contract.
Another important factor is having a positive experience with your vendor, especially if you enter into a multi-year relationship with a leasing company. Check out their customer testimonials to see how satisfied other similar medical offices are working with them. Even if you’re not leasing and choose to buy, finding a company that you can continue going to for new equipment will also depend on how well they serve their customers.
So how do you ultimately decide whether to buy or lease? It all depends on what your medical office can sustain operationally. If you’re constantly replacing printers, but hardly ever need to replace other equipment such as refrigeration systems, buying makes more sense financially. You might also want to check other quality printer brands, if you’re replacing them too frequently.
The Bottom Line on Leasing versus Buying
Each medical practice is different and will require certain sets of equipment, office machines and supplies to operate efficiently. Keep in mind the pros and cons of buying and leasing equipment and ultimately how they meet your business needs. We hope this article provides the guidance you need to decide which items to buy or lease.