Today money rules the commercial world even more than it used to in the sense that there is too less of it around and too many demands on the funds that are available. The term ‘stretching the penny’ has become even more significant in today’s world. Therefore, it should come as no surprise that organizations are just not willing to take on capital expenses if not inevitable. If anything, they would like to pay only to the extent they have used a product or service. While the consumption-based model is not a new concept especially in sectors like telecom or utilities, it has now permeated many new and unexpected segments.
In this article, we will look at the potential of the pay-per-use model market, the problems, and the possible solutions for them. However, the equipment rental business is no longer straightforward as it offers everything from the tool or equipment rental to a complex array of implements required for a more significant project.
The range of pay-per-use options include:
- Pay-per-use within a rental plus service agreement: The leasing of a car to use and only pay as per usage is an excellent example of this model. The lessee would have to pay only as per the miles or kilometers driven. The maintenance and supply of inputs for the device would be the onus of the lessor.
- Pay-per-minute of usage: This works for telephone or internet usage where the subscriber would be billed on the usage with conditions built in for limits and extra charges if the limits are exceeded. There models of usage where the customer can pay-per-hour as well.
- Subscription-based pricing: This usually works with the use of bigger equipment like a generator for a factory premise that is leased where the user pays a fee regularly. The concept is where the customer can pay subscription for a certain period. There are versions of this lease where the customer can opt to buy the asset or opt not to do so.
This is just a short list of different kinds of pay-per-use leasing option models or similar leasing options.
While these options sound great from the end-consumer point of view, keeping track of the type of lease and all the parameters involved can be a tough challenge for the lease provider. You not only need a robust rental management solution that ensures that your business does not come to a standstill when the situation gets hectic but also have the capability to manage every aspect.
The ideal rental and leasing solution would need to:
Provide flexible options: For any rental and leasing business to be able to compete in this dynamic and demanding environment, they would need flexibility built-in to any solution they use. Without robust and stable systems that can still allow flexibility to configure options, the leasing outfit would face many operational issues.
Usage trackability: When a business considers the pay-per-use model of leasing as an offering, they would need the wherewithal to be able to track the usage accurately. As a result, this would mean registering ‘meters’ or other means of measuring usage. The records or numbers on these ‘meters’ have to be updated simultaneously at the back office, field personnel’s devices, and the client’s records.
Configure payments: Configuration of the payment models of the different pay-per-use rental and leasing options needs to be another factor in the software solution. This is something that an excellent rental ERP would provide for.
Overview of assets: When a business has various options for leasing not to mention an array of equipment, it becomes crucial that the summary and status of assets is visible. A clear summary would not only ensure that the equipment is kept in the best condition but also ensure that the right commitment is made to customers. This also provides proper invoicing and update of records.
Insights and reports: Insights on the way equipment is being used, and the way demand rises or falls, and many other factors can help in better planning and overall strategy of the company. The use of information can be used in many scenarios to predict future demands and plan accordingly.
Are you looking for a pay-per-use rental solution? Get in touch with our experts to discuss how To-Increase can help. We’re more than happy to provide you with a tailored demonstration.