If you have ever had your software purchase requests denied, delayed, or dumped, then you have felt the power of the Bean Counters. The Bean Counters (accounting crew) at your company have good reasons to keep the dollars corralled and contained. Not only are they trying to keep you in the black, but the Extra-Super-Nerdy Bean Counters are thinking of that unavoidable event that happens to us all: TAXES. Here’s how you can use the power of taxes to get those Bean Counters on your side when it comes time to buy that spiffy new S1000D software suite.
First, a quick lesson on taxes (US). When your company makes a purchase, that purchase is either expensed (aka deducted) or depreciated. Expensed purchases are 100% deductible the year the purchase is made. For example, if your company purchased a $20 red Swingline stapler, they would be able to deduct the full $20 that year (which would help your company pay less taxes).
Depreciation, on the other hand, allows you to deduct a portion of the purchase the year the purchase was made as well as several following years. For example, if your company purchased a $10,000 copier this year, they would be able to deduct $2,000* a year over the next 5 years. That means that your company is out the money this year (full $10,000), but they only get to deduct a portion of the purchase price this year ($2,000 in our example).
Got that? Good, because I was getting really bored talking about taxes. Here’s how we use that knowledge when trying to sell the Bean Counters on an S1000D software suite.
Many S1000D software suites can cost a lot of money. They are often large purchases that have to be depreciated. If you can reduce the cost of the purchase AND make it an expense, those Bean Counters will start turning their heads and getting out their “Approved” stamps.
That’s where Software as a Service (SaaS) comes in, like OneStrand AIR. Instead of making a large software purchase that is depreciated, SaaS lowers the price (you’re leasing the software instead of buying it) AND shifts it from depreciation to expense. That’s one of the reasons why almost every major software company out there today is shifting away from the “purchase” model and going to the “leasing” model.
Unless you’ve been hiding in a hole over the last 10 years, you’ve probably experienced this yourself and you know it’s getting harder to find software that you can outright purchase. Which is why many companies want to charge you an annual subscription fee.
Use this knowledge to your advantage when choosing the right S1000D software suite, such as OneStrand AIR. Our OneStrand AIR SaaS option gives you a lower cost and will help tickle the tax bone of those Bean Counters.
*This example assumes a 20% depreciation schedule to help explain the concept. That may not be the rate for your company or its purchases. Consult with your tax professionals to find out how depreciation would affect your purchases.