A Year-End Game Plan for Buying Technology

Jeff Zbar

Around the end of each year, Steven Press looks around his office to see what technology could make things run a little smoother.

Most recently, it was a new computer network server and a laser printer, both purchased in the weeks leading up to the New Year.

Why at year end? First, spending around $3,000 on the purchases before year-end, Press was able to get a Sec. 179 tax write-off for new business equipment. More importantly, he and his staff will be able to get the machines working smoothly and master any learning curves before the certified public accountant’s office heads into tax season, he said.

“It takes time to get the kinks out,” said Press, president of Steven R. Press CPA , P.A., in Davie, Fla. “In my business, I want all the experimentation done before January.”

Last-minute equipment and technology purchases are nothing new for small business owners. From learning how to use new hardware or software, to taking advantage of the tax deductions on the current year’s return, the rationales for new purchases are many.

But just because the technology market is flooded with low-cost or popular products doesn’t mean a company needs to have a plethora of peripherals hogging space and resources. Computers and office equipment consume space, financial resources and even time spent learning how to operate the equipment.

Leaning toward a new technology purchase? First make sure the equipment is needed – and not just wanted, said Joe Paul, managing partner and president of The Bulldog Group Inc., a Sunrise, Fla.-based computer consulting firm.

“I ask my clients to justify the purchase and installation of new hardware and software just as they would anything else,” Paul said. “It should be justifiable, crucial to the operation of the business, and the company would lose revenue without it. If it makes good business sense, do it.”

Riding the fence on some new technology purchases? Ask yourself how reliable your existing equipment is, how long it should last, and what would happen to your business if it failed during the busy season, Paul said. Does your computer’s slow speed create frustrating wait times while tasks are being completed? Ten hours of lost productivity a month at $100 an hour means a new $1,000 computer central processing unit (or CPU) could be justified in 10 months. Or, maybe a less expensive processor upgrade will provide the needed boost.

“If you feel frustrated waiting for the machine, you’re losing productivity,” he said.

While Paul advises his tax, accounting and other legal or professional clients purchase new or updated software annually to keep atop the latest laws or tax code, he recommends clients not necessarily purchase the latest version of other software products. Just-released versions of computer operating systems – like Microsoft Windows XP or Windows ME before it – may have errors or bugs that are resolved in months following the introduction. Those bugs could result in downtime for the business, he said.

“The pioneers get caught in the marketing hype and take the arrows,” Paul warned. “I never install a release that ends in zero.”

For Press, the new printer will decrease the staff wait times for documents. The new server replaced an obsolete unit, whose failure could have resulted in a wait for replacement parts.

“Lose your file server during tax season and you could be out a week,” he said. “That happened once before, and I don’t want to go through that hell again.”

With all the new technology on the market, though, Press didn’t see any need to replace all his computers just to have the latest and greatest – and often the most expensive – products available, he admitted. He also decided to hold off on investing in a new operating system until after the coming tax season. Next year, he might buy several flat-panel displays to replace the traditional 15-inch monitors his office has used for years.

“You need to examine equipment and software every single year. With technology running the business, this seems it’s the year-end curse,” Press said, though adding he won’t rush into any new purchases. “If you’ve got something that works, don’t screw around with it. You’ll be looking for trouble.”

Think you need some new technology to improve your business productivity? Ask yourself or your business manager these questions:

     

  • Is the current technology slow and frustrating? Would faster hardware or software lead to greater productivity and efficiency?
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  • Is the new desired technology necessary for the operation of the business, or is it more for the whim and pleasure of the owner?
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  • Before making the purchase, have you researched the features and competitively priced the products on the market?

If you’ve justified the purchase and know the product you want, don’t wait, Paul said.

“If you need it, get it today," he said. "Waiting six months for technology to improve or prices to drop means you’ll have lost six months of productivity. Make your purchase and don’t look back.”
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HOME OFFICE SUCCESS STORIES is a monthly electronic magazine distributed free for the asking, from Jeff Zbar's Goin' SOHO!. For more information or to schedule speaking engagements or seminars, contact Jeff at Phone:954-346-4393 Fax:954-346-0251, or via electronic mail at:jeff@goinsoho.com

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