Asset Rentals has become a popular choice as mines are realising that capital can be better spent on core operations while matching the flow of capital equipment with income generation,
and in most cases rental agreements provide an option to either return the machines or continue to rent them after contract ends, depending on the business requirements.
Asset rentals is not only limited to mining equipment such as shovels, excavators, loaders and others, but it includes ICT equipment, coffee machines, printers, vending machines, photocopiers, telephone systems, CCTV security and many others.
The task of keeping operations both cash positive and efficient is not an easy one and calls for appropriate technologies. Buying mining equipment such as shovels can be a daunting task that is time consuming and costly, but by renting, many companies are able to enjoy the latest technologies and keep their debt to equity ratios low.
Rentals support and improve a company’s cash flow management. This helps to eliminate the increase in liabilities, resulting in superior returns on assets and more predictability in replacement cycles. In addition, rentals do not require the cash outlay of a deposit and do not utilise existing finance facilities.
In an environment where the only constant is change, asset rental affords one the freedom to upgrade and change the equipment whenever the need arises. With upgrades available at the end of the contract, one can be assured that the latest in technology is always available to the client.
Reduced total cost of ownership
On even a single PC has cost factors associated with it and one must be aware of the effect that purchasing has on the total cost of ownership. Managers are encouraged to use at least an average cost per computer to plan for expenses and also allow comparisons in the decision-making process.
Credit line preservation
Renting allows you to preserve the available credit from the bank for additional working capital, operations, expansion and acquisitions. Asset rentals have added benefits such asset tracking, where you are able to know where the asset is all the time.
Having the expenses amortized over rental term allows the organisation to effectively budget over the term of rental. You are able to know how much cash you have available each month and assist in planning.
Additional financial benefits
Other benefits are no large cash outlay, no depreciation, a hedge against inflation, improves against ratios, tax benefits, improves balance sheet gearing, free working capital, rental payments are flexible, asset tracking and asset management, administration time is slashed and reduced risk.
MCS rental software solutions puts hire businesses in control
Hire businesses wishing to sustain their competitive advantage, improve profit margins and optimise their efficiency are now showing a readiness to use modern technology to unlock their business potential.
Two hire businesses that have recently taken the plunge and integrated new software into their business are the compressed air and pneumatic rental equipment specialists, Thembeka Air and the internal hire division of Tubular Plant Hire, who support their group’s activities in the construction and manufacturing sectors.
Thembeka Air and Tubular Plant Hire both chose MCS-rm, the leading rental management solution from MCS, to fulfil their mission of improving customer service and efficiency.
MCS-rm – A rental software solution for ambitious businesses
Microsoft Windows-based MCS-rm offered Thembeka Air and Tubular Plant Hire a fully integrated software application which manages the whole hire process from quotes and contracts through to invoicing and accounts along with modules for accounting, mobile dashboards, purchase ordering, CRM and business reporting.
As a result, Thembeka Air has gained tighter control of its growing business. Using a consolidated software solution has reduced paperwork, eliminated labour-intensive manual processes and seamlessly integrated the company’s different operations, such as purchase order processing, contract administration and the workshop function.
MCS-rm has increased Tubular Plant Hire’s operational efficiency and management control, as well as improving asset tracking and the analysis of key performance indicators.
MCS is a stable technology partner with a local presence in South Africa and years of experience in the hire industry. The MCS-rm software is used by 500 customers worldwide. Visit www.mcsafrica.co.za to read more.