CCTV - consider the rental option

August 2001 Surveillance

In addition to the primary objectives of generating profits for their shareholders, growing the business and delivery of customer services, today businesses also have to protect their assets, customers and staff from the predations of criminal elements operating within their internal and external environments in which they operate.

Often an organisation may have allowed for either none or not enough capital expenditure budget for protection of their assets and staff, when these nasty surprises occur such as armed robberies, burglaries, stock losses etc. However, what usually happens is, due to a lack of funds, the necessary increased electronic security precautions are shelved or put on ice and cheaper systems become the order of the day. Or the secondary issue of cost of ownership during the life cycle of the system becomes a burden on the resources of the organisation if a purchase decision without full maintenance was the decision taken.

In many instances such poor management decisions can lead to increased losses and in the worst cases ultimate closure of that operation. What then should be done to avoid such scenarios becoming a reality in our everyday world?

Getting started

Normally the first requirement would usually be to implement a proper risk audit to ensure that one's organisation has sufficient security solutions in place. Secondly, once identified the areas of concern should be prioritised and then proposals sought by bona-fide security professionals with the necessary costs related to implementation of such measures recommended. Then the budgets for the above would be pushed for approval and implementation enacted.

Rental advantages

All this may sound simple enough, however this is where the problems start, simply because in many organisations, members of the management team have other agendas for the available funds at the companies disposal such as purchase of that badly needed production equipment which will generate profits, or the acquiring of new vehicles for the organisation.

One possible solution to an organisation's security needs may lie in choosing the rental option that is on offer from companies such as Sensor Security Technologies. This options often has many advantages such as:

* Monthly rental of capital equipment is an affordable option providing for the use of the equipment without laying out capital that could rather be used for financing your core business activities.

* Rentals are 100% tax-deductible as an operating expense, thereby optimising tax liability management.

* Payment of VAT up front is avoided. The customer will be entitled to claim monthly VAT payments made.

* As rentals are an operating expense and not a capital expense they are not governed by capital expenditure budgets, nor onerous internal approval procedures in most cases.

* As rentals are totally 'off the balance sheet', current and return on asset ratios are actually improved. There is also a saving in the area of costly administration overheads, as fixed asset registers and depreciation schedules are not affected. Rentals are shown as an operating expense in the income statements and not as a current liability.

* One also has the option of a technology refresher/upgrade as one's needs change over the period of the agreement, thereby keeping abreast of modern technology.

* Rentals may be escalated on an annual basis, thereby reducing initial costs, and linking payments to inflation and/or mapped to revenue patterns. Such as in seasonal businesses.

* Rentals are able to provide offshore companies with the advantage that rentals are not shown as a contingent liability but rather as an operating expense.

For further details contact Gary van Staden, Sensor Security Technologies, on tel: (011) 452 1339.

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