(Pictured above, left to right, top to bottom: Phil Buysse, Nick Capparelli, Fred Carollo, Michael D’Errico, Jennie Fisher, Rob Parker, Steve Riggs)
This month our Virtual Panel Series addresses a host of finance-related questions, including new methods of reporting, measures leasing companies are putting in place to better support the dealer community, how consolidation is impacting their business, and a hot topic””how dealers can prepare for the new FASB accounting standards as it applies to leasing.
Because of space limitations we couldn’t include every question we asked our panel in our print edition. As we continue to hear more about seat-based billing (SBB) as it pertains to MPS at industry events and in discussions with individuals throughout the industry, we thought it would be appropriate to find out how the leasing industry is addressing this emerging opportunity with our bonus Virtual Leasing Panel question.
Participants include Phil Buysse, SVP, division manager, office equipment, US Bank; Nick Capparelli, managing director, LEAF; Fred Carollo, office products originations leader for Vendor Equipment Finance, TIAA Bank; Michael D’Errico, director, Equipment Finance, Office Imaging unit, CIT Group Inc.; Jennie Fisher, VP-general manager, Office Equipment Group, GreatAmerica Financial Services Corp.; Rob Parker, senior vice president, Wells Fargo Equipment Finance; Steve Riggs, president, Office Technology, DLL Group.
What are you hearing about seat-based billing for MPS? Do you have a plan to handle the bundled invoicing on such agreements””agreements that could include both MPS and MIT?
Buysse: It is still too early to tell if there will be significant traction for seat-based offerings in this space, however our invoicing flexibility is well-suited for any usage-oriented billing method.
Capparelli: At LEAF we’ve offered seat-based billing for a number of years, but few customers have taken advantage of it to date. If a dealer wants to bill a maintenance fee we bundle it into the payment for the customer, while the dealer receives a lump sum. If the dealer would rather have maintenance fees separated in the contract payment, it works like a full payment. We do offer cost-per-usage, where the MIT amount has to be a set report and the MPS amount has to be a metered set. With the continuing shift in focus from capital to operating expenses and the ongoing move to digital technologies, we expect greater demand for seat-based MPS and MIT.
Carollo: We have been handling these transactions for a while now. As more dealers are selling IT solutions along with the more traditional document products and services, they need a single all-inclusive contract. To help our dealers support their customers, we are in the process of launching some offerings to accommodate the ever-expanding solutions appetite.
D’Errico: Our FlexAbility system was designed and built with exactly this kind of capability in mind. Not only does it ensure that the billing matches the sales agreement, however complex that may be, but it also generates an invoice that can be customized to match the procurement requirements of the customer. That leads to smoother and quicker payment, minimizes or avoids the need for costly personnel to resolve billing inaccuracies or disputes, and greatly improves the customer journey overall.
Fisher: The seat based billing (SBB) model has been used in the IT field for years and is slowly being adapted by MPS dealers across the nation. There is a lot of “buzz” going on about SBB, and a number of prominent dealers in the market are doing it and doing it successfully.
GreatAmerica has partnered with Print Audit® and is proud to lead the way with the world’s first financing agreement designed specifically for SBB and the office technology dealer. We created documents to support the administration, integrations to bring efficiencies to our dealers’ processes, and training on how to craft the deals. In order to offer SBB for managed print, navigating the financing aspect can be a critical piece.
GreatAmerica offers a stand-alone SBB document or a Master Agreement with schedules for Document Management, SBB and IT Managed Services that will all roll up into one invoice to the end user.
SBB makes good sense for dealers ““ their revenue remains constant despite declining prints, provides the ability to layer additional services, provides differentiation from competitors and reduces administration as they do not need to collect meter readings to calculate overages. For the dealer’s customers it provides improved efficiencies in workflow management, cost savings with implemented rules, visibility as to who’s printing what (user management), single invoice for multiple services/offerings and predictable monthly spend (100% budget-able).
Parker: To date we have not seen much demand for seat-based billing options but we can and do support it. Typically, a seat-based billing approach will require monthly adjustments (moves, adds, changes, etc.) depending on the customer needs. This can be difficult to manage effectively unless the dealer resources the customer engagement appropriately.
Riggs: Usage-based and managed services transactions represent a material percentage of our business today, and we feel these types of structures will continue to evolve and grow in popularity with our partners. DLL has a long history of providing financing solutions for office products dealers as well as the IT channel. One of the unique attributes of our structure is that we support both channels in our Office Technology global business unit. We have decades of experience in these converging market segments and are using that experience to help our partners transition through development of new payment structures, contract vehicles, and flexible terms.
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