Businesses, private and public, have started to see the many benefits of self-service solutions. From wayfinding services to self-payment, businesses are reaching their audiences through engaging content displayed on interactive kiosks and digital signage. While self-service initiatives provide significant ROI opportunities, businesses should understand all of the necessary costs and how they plan to fit those costs within their current budget before moving forward. To help businesses prepare for kiosk and digital signage purchases, we answered the most frequently asked questions about financing self-service solutions.
Self-service initiatives are an investment in the company’s future. What percentage of the total cost should buyers be prepared to pay upfront?
For new customers, first orders typically require a 50 percent deposit unless it’s a government entity or a higher education institution. The 50 percent deposit allows the manufacturer to be more responsive to customers specific needs. Nearly every kiosk has some element of customization; therefore, most manufacturers don’t hold large volumes of component inventory. Since every enclosure is built to order, the deposit allows manufacturers to buy the peripherals for each order. This lowers overall costs and allows the manufacturer to pass the savings to their customers. For smaller orders (i.e. less than $5K), it’s always better to pre-pay as it will make the process go much more quickly.
Self-service solutions range dramatically in price based on a number of factors. Are there extra expenses that buyers should be prepared to pay (e.g. shipping, installment, etc.)
Shipping and installation are rarely included in an initial quote. Shipping, of course, is always subject to change; so, many manufacturers will request a quote when the project is near close. Installation is not typically included unless specifically requested. Another fee that is worth considering is field support for the kiosk deployment. Customers should inquire about a Service Level Agreement (SLA) if this is necessary. There are multiple options when it comes to supporting kiosks post deployment. Additionally, software license renewals should always be considered. Most software is either sold as a Client Assigned License (CAL), which will require annual maintenance (usually 20 percent of the licensing fee), or Software as a Service (SaaS), which will need to be renewed annually at its full amount.
Depending on the company’s size, billing responsibilities are assigned to a single finance officer or an entire accounting department. What are the benefits, if any, for a company to pay Net 30 instead of Net 60?
The benefit of paying net terms is that a company can defer payment for that amount of time. This will free up working capital and allow companies to manage cash flow accordingly. On the flip side, it may not be the best arrangement for the vendor. Terms are a privilege and are typically granted to companies who are consistent in paying on time.
If a company wants to invest in a self-service solution but is unable to pay the required amount upfront, which steps should the company take in order to finance the initiative?
If funding a project is an issue, companies can always bring in a third party to finance the project. There are a number of capital finance companies willing to put up the money in return for earned interest. These can be lease programs or finance purchase programs with multiple term options. Companies that go this route should be prepared for background and credit inquiries as well as possible requests for collateral. All deals and projects will be different.