If your office or organization has a copier or multi-function printer, there is a good chance you are either currently under a maintenance agreement of some kind or have heard it mentioned to you or a fellow employee. Though, you may be unaware of what all it entails or how the costs are configured, this article will provide a breakdown of the elements in a maintenance agreement, how the terms are constructed and how to tell if it is a fit for you.
What is a Maintenance Agreement?
When you use copiers and printers there are consumables that have to be replaced and maintenance that is necessary for the equipment to remain operational and efficient. With a car you have to fill up the gas, change the oil, and get new tires or parts every so often. For office equipment you need to change toner/ink, waste toner cartridges, paper feed tires, drums, and maintenance kits along with having cleanings to prevent wear and smudges from occurring. With a maintenance agreement, a company provides you with a quote for keeping your equipment in working order and for providing any necessary consumables and labor. Some restrictions such as paper, staples, and network related calls may apply so it is important to understand exclusions that are written into your contract before signing.
Toner is the fuel that keeps your prints coming through. Most commercial copiers run on toner versus ink because of the volume of pages capable with a single toner cartridge. Most contracts have a dealer responsible for providing toner to the client either based on a request from the customer or through an automated alert sent remotely from a data collection agent on their network. Depending on the company you partner with, the toner may even arrive to the end user(s) before they are aware the machine is low on toner.
Parts & Supplies
Parts and supplies other than toner that would be covered include but are not limited to: developer units, drum units, feed tires, rollers, various electronic boards, fusers, and operation panels.
Manufacturers have greatly increased efficiency for their parts and supplies over the years and many are able to be replaced with far less interruption to the production flow of the workplace. With the complexity of the newer devices, brand specific model training is still needed for most repairs.
Labor & Diagnostics
Much like other service contracts you may have encountered, copier companies have labor costs associated with deploying a service member to a call and with the amount of time on-site. While this cost can be burdensome if paid by the hour through a “Time & Material” contract, a maintenance agreement would include all labor charges at no additional costs to the customer barring any exclusions negotiated into the contract.
In addition to the labor that you receive on-site, most companies have a team of employees that monitor alerts from your devices and help diagnose possible “quick fixes” you may be able to make on your end to get up and running faster. An example may be pushing a firmware update remotely or suggesting the user to enter a particular code to reset the machine.
How the Agreements are Laid Out
As with any contract there are terms and conditions that both parties will have to agree to, but the basic layout for most maintenance agreements will be monthly, quarterly, or annually priced for specified amounts of “clicks” and overage rates. While some scenarios call for different models such as cost per copy (CPC) contracts, most fit in well with the standard model. Another aspect to note is whether the maintenance agreement is separate or combined with a lease agreement through a Service Inclusive Lease (SIL).
This is a function where the dealer you work with gauges the amount of prints and copies, also known as clicks, your organization runs on average. The usage periods for the contracted volumes can be set for monthly or anywhere in between up to annually. It is important to ensure that the company you partner with understands your business and printing habits. If you are a company with heavy seasons and light seasons of printing, then it would make sense to go with quarterly or even semi-annually to spread that volume out with lighter months. These volumes are tracked either by meter readings sent in by your employees or through automated readings made possible by the data collection agent referenced earlier.
Overages apply if you go over your contracted amount. It is an additional expense that is due to your service partner at the end of the billing period specified in the contracted volume part of the contract. If you have a color device, you would have two overage rates, one for color and one for black and white (B/W). Color printing is much more expensive than B/W due in part to the three toner colors (cyan, magenta, yellow) that are used in combination with the black.
If you had a color copier and a monthly contracted volume of 2,000 B/W and 500 color with overage rates of $.08 (color) and $.01 (B/W) and you ran 3,000 B/W and 600 color, you would be billed (1,000 x $.01) + (100 x $.08) = $18. Though, say you had a quarterly overage contract and coupled these previous numbers with two months of 1,500 B/W and 450 color, you would then have no overage bill at the end of the quarter.
Sometimes, companies decide to exclude certain aspects from their contracts. This is totally fine and can be negotiated with your dealer partner. One area we see this with is color toner. Since color clicks carry a higher price, some organizations decide to pay for their own color toner as needed instead of through a contracted amount. While this may save some money for the organization, there are risks associated if you do not address the coverage of color drum units as that would not be covered under the maintenance unless negotiated into the deal. In addition, CPC contracts are sometimes elected so companies can pay based on their exact usage; negating the need for contracted volumes. Some companies will require a minimum number of clicks per period to qualify for this type of contract.
It is important to understand that your maintenance agreement may either be tied into a lease agreement with equipment through a SIL lease or be a separate document not beholden to the lease terms. If you are in a SIL lease, you will have to either be let out of the maintenance agreement held with the dealer or end the lease obligation, rather than just ending the maintenance agreement in regards to the end of term requirements. End of term requirements vary from dealer to dealer but usually last for a year and require at least 30 days written notice to cancel.
Should I purchase a maintenance agreement?
If you are like me you get overwhelmed with companies offering warranties for their products. I want to make clear that is not what we are talking about here. Maintenance agreements cover things that will happen whether you agree to one or not and also cover those expensive repairs that you would hope would not be necessary. Whether you buy one is completely up to you though peace of mind in knowing you are covered and partnering with a specialist in the field is rarely a bad idea.
If you would like to learn more regarding maintenance agreements or perhaps how to maneuver a situation you are currently in with your provider, we at Copiers Plus would love to help! Reach out to us online, via email at [email protected] or give us a call at 800-648-7081.
To schedule your complimentary assessment, contact us at 800-648-7081 or visit our website.
Drew Smith currently serves as Director of Communications for Copiers Plus. The company specializes in modernizing office equipment and increasing efficiencies in workplace communications throughout the state of North Carolina. To learn more about how Copiers Plus is providing their customers with innovative document solutions and enhanced printing transparency, visit www.copiers-plus.com. Drew would love to hear from you at [email protected].
Cece Nunn - Jan 19, 2021
Christina Haley O'Neal - Jan 19, 2021
Johanna Cano - Jan 20, 2021
Jessica Maurer - Jan 20, 2021
Jessica Maurer - Jan 20, 2021
The construction and IT sectors are the focus of new collaboratives forming this year to address the area’s workforce development needs....
Since she left the corporate world less than 10 years ago, Diane Hodapp has been on a roll....
With the market tumult of 2020 behind us, financial advisers are ready to help their clients navigate the possible challenges and opportuni...