MCPc Blog

Focus on Leasing: How to Manage Lease Schedules

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After successfully leasing new technology equipment and/or services, it is important to manage your lease schedules on an ongoing basis.  Lease schedules will affect future budgets and, without the proper attention, can cause you to make hasty decisions that may hurt your budgets, prompt you to make month-to-month payments, incur costly end-of-lease penalties and/or services.  The good news is that managing your lease schedules can be very easy, and if done correctly, put you in a position to be proactive with technology refresh projects.

Let's start with a quick definition: A lease schedule is simply a list of leased equipment and includes information such as the lease start date, term, monthly payment and an equipment description.  Below is a sample lease schedule.

It is common for lease schedules to be available in two basic formats: 

• Presented as data in a web browser, or
• A simple spreadsheet.

Most leasing companies and banks have some type of client-facing online tool that you can use to access this data over the web.

Here is where managing your lease schedules gets tricky, and why it can be helpful to standardize for internal management: Say you have elected to lease various technology products and services ranging from copiers and printers to PCs, laptops and servers.  You may have multiple lease partners and lease schedules from each partner.  In order for you to effectively manage all of these schedules, you need to place all of the data into one place, all in the same format.

Whether you choose to manage your lease schedules with a simple spreadsheet or a complex asset management database, you need to proactively get your hands on the raw data.  While each of your lease partners will be more than happy to share the data, each partners' data will come over in slightly different formats. 

The first step is to collect all of the raw data from each of your lease partners, and organize it into a consistent, usable format.  Once the data is organized, you can begin proactively managing your lease schedule and resulting technology refresh projects.

Tips for Effectively Managing Your Lease Schedules

1. As a part of your lease partner evaluation process, confirm that your potential lease partner will give you access to online tools that help you manage your lease schedules and schedule data.  Ask for a software demonstration.  Confirm that the leasing company's software meets your needs, is easy to access and easy to use.  You potentially won't use these tools on a regular basis, so even a small challenge may become a large one down the road if you don't remember how the software works.
2. Designate someone on your team that can become well-versed in leasing, your internal operations related to leasing and how your financial decision makers prefer to leverage leasing options.  Create goals or incentives for this person so that your technology refresh projects are proactively attended to in a way that minimizes cost.  Measure the results of this effort. It affects your bottom line.
3. Ask your preferred reseller or VAR how they can add value through lease schedule management.  It may be the case that the reseller or VAR has a solution, and all you have to do is ask for it. 
4. Leverage your lease schedule information to help budget for future quarters.  Your lease end dates tell a good story. You can basically count on some end-of-lease activities and a decision whether or not to return the products, buy them out or extend your lease.  Knowing your lease end dates gives you time to analyze your options, interact with the leasing company and get additional information from manufacturers and/or resellers and VAR before making a decision.
5. The success of a leasing initiative is often determined by your organization's ability to manage its equipment return process.  Working with the lessor, establish a process for communicating the disposition of each asset on a lease schedule at the end of lease.  The processshould be started well in advance of schedule expiration so there is enough time to have therefreshexecuted smoothly.
6. Consider structuring lease payments for seasonal fluctuations in revenues and/or structuring your lease agreement to make quarter payments based on quarterly lease schedules.  Using quarters instead of months can reduce the amount of volatility that you manage.  Less volatility means more control.  Also, it may be the case that your organization budgets on quarters rather than months.  Aligning your lease schedules with your budget cycles (either fiscal or calendar) makes leasing easier on the entire organization.

Managing your lease schedules is critical to managing and controlling your IT budgets and technology refresh projects.  Having a plan and building best practices around that plan will make your projects a success.  In addition, you will build additional credibility with the financial decision makers in your organization. 

Which method works best for you?  Please feel free to comment.

Focus on Leasing Topics:

1. Leasing Vocabulary
2. Financing Decisions
3. Advantages of Leasing
4. Capital vs. Operating Leases
5. Understanding My Payment
6. Picking a Lease Partner
7. The OEM Lease
8. Interest-Free Leasing
9. Managing Lease Schedules
10. Managing the End of Lease Process

Jeffrey Goldstein is Senior Consultant at MCPc and is responsible for the delivery of hardcopy and value added services within the Lifecycle Management Group.  Jeff earned his BS in Management of Information Systems and Supply Chain Management from The University of Akron and his MBA from the Weatherhead School of Management, Case Western Reserve University.  Connect with Jeff on LinkedIn.