When it comes to purchasing or leasing an office copier, many organizations opt to place their copier under a managed print services contract. Whether you have an existing copier service contract, or you are evaluating service contracts from multiple providers, it’s crucial to understand the terms of the service contract you’ll be signing. Copier service contracts often come with a variety of terms that may seem confusing if you’re unfamiliar with them. Below, we’ll break down some of the key terminology to help you make informed decisions and avoid unnecessary or hidden costs.
What’s Included in a Copier Service Contract?
Typically, a standard copier service contract includes all supplies except for paper and staples. This includes toner as well as routine maintenance items such as drums, waste cartridges, and fusers. A standard service contract will also include all parts and labor for break/fix repair.
How Does Billing Work with a Copier Service Contract?
There are a few different components to billing for copier service contracts that are necessary to understand.
Billing Frequency
For most standard copier service contracts, billing occurs on a monthly basis (although some providers will offer quarterly billing) and you are billed in arrears.
Costs Per Page
Copier service contracts are commonly referred to as cost per print contracts because you are billed based on the number of pages you print. Your contract will specify a cost per page for black-and-white pages and a cost per page for color pages. Additionally, any printouts on larger than standard 8.5” x 11” paper, such as tabloid size 11” x 17”, are usually billed as two pages, not one.
Base Charges
You may see that your copier service contract includes a base charge. This monthly base charge helps to underwrite the break/fix service costs associated with your print device. While not all providers implement base charges, for those that do, you’ll typically see them implemented in contracts for lower end print devices such as low speed ban desktop printers and MFPs.
Page Minimums
It’s important to evaluate if your copier service contract includes a monthly (or quarterly) page volume allowance, and if so, what the cost per page is for any amount printed over that allowance (which is known as an overage). Conversely, your contract may not include an allowance, but rather may enforce a minimum number of pages be printed per month. Both page allowances and page minimums typically have a “use it or lose it” policy, where you are paying for those pages regardless of whether you print that much and that any unused pages cannot be rolled over to your next billing cycle.
At Parmetech, we’re of the opinion that customers should only pay for what they actually print, which is why we do not ever include page allowances or enforce page minimums in our managed print services contracts. Nonetheless, it’s important to always evaluate your contract to make sure you’re fully aware of any included pages to minimize the risk of hidden costs.
Understanding Cost Escalators in a Service Contract
As copiers age, they become more expensive to support – supplies and parts for older devices all become more expensive and sometimes harder to find. Therefore, in many copier service contracts you will find language around escalators. Escalators allow for the increase of contract costs over the term of the agreement (i.e., base charges and costs per page). It’s important to evaluate your contract to understand if your contract allows for escalators as well as how often and by how much your contract pricing can be raised.
Understanding Termination Clauses in a MPS Contract
Generally, most MPS providers have language within their contracts that requires the customer to provide written notice of their intention to cancel their contract within a specified timeframe prior to the contract’s designated termination date (i.e., provide written notice no earlier than 120 days but no later than 60 days). For example, if your contract’s designated end date is December 1st, then you would be required to provide written notice of your intention to cancel the contract between August 3rd and October 2nd. If you wish to cancel the contract outside of this timeframe (i.e., evoke early termination) many copier service contact providers will often include language in copier service contracts around a financial penalty for doing so (i.e., an early termination fee).
Summing It All Up
Whether it’s controlling costs through cost-per-page pricing, improving productivity with document workflow optimization, or securing your print environment with user authentication, a well-structured managed prints services strategy can have a significant positive impact on your business. Understanding the key terminology in your printer or office copier service contract is essential to maximizing the value of the service. By familiarizing yourself with the terms we’ve outlined above, you’ll be better equipped to avoid hidden costs, compare potential contracts accurately, and ensure that the contract truly meets your organization’s printing needs. Make sure to review the details carefully and clarify anything you’re uncertain about with your provider before finalizing the agreement!
Summing It All Up
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