Starting a business can be a large feat that comes with small decision making. Some of the fine details, like keeping proper track of how many hours each employee works, may seem like an insignificant part of the big picture. However, choosing a time and attendance system that makes time tracking a smooth process can be a big decision.
When it comes to your time and attendance solution, one key question you need ask yourself is whether you want to buy or lease your time clocks. There are pros and cons to each option. Knowing what those are can help you make the best decision for your business.
Type and quality of time clocks
Before deciding whether to buy or lease a time clock, it is important to know which type of time clocks are available to you. Along with type, you will need to assess what quality time clock your business needs.
Time clocks range from economy class, to mid-range, to high-end. Economy time clocks provide the most basic level of functionality and are optimal for temporary usage. Mid-range combine the lower cost of the economy models with the more advanced functionality of the high-end ones. These are generally easy to use and offer many features, such as automatic identification and internet compatibility. High-end are the most expensive and will include the most advanced functionality. These have features such as kiosk displays and touch screen options.
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One option to consider when acquiring a time clock is to buy it outright. This is the ideal option for some, but not everyone. Consider the cost, pros and cons associated with buying a time clock.
The type and quality of time clock you purchase will factor into the price. Life span and malfunction rates are important considerations when estimating the total cost of purchase, not just how much you will be spending up front.
"Buying a time clock is no different than any other purchase – you get what you pay for," Ryan McColgan, vice president of sales and marketing for Accu-Time Systems, Inc., told Business.com. "It might be tempting to spend less money on a time clock in the $200 to $300 range, but those devices will often end up running you well over $1,000 due to higher failure rates and short life spans … a well designed and built time clock will live up to a decade."
Ed Squires, CEO of Acumen Data Systems, said when considering costs, businesses must factor in all the add-on equipment that is needed.
"Pricing includes a time clock, wall mount and power pack," Squires said. "Options for auxiliary ports, power over ethernet, UPS batteries and industrial enclosures could add to the pricing where applicable."
According to Squires, purchasing prices range from a couple hundred to a few thousand dollars, depending on the quality. For example:
- Economy Class – $150 to $895
- Mid-Range – $995 to $1,795
- High-End – $1,795 to $2,795
When choosing which quality is right for you, be sure to assess your needs. If your business only requires the simple use of a punch in / punch out time clock, it might be best to purchase an economy class. On the other hand, if your business requires a high-functioning, high-security level time clock, expect to spend the money on a high-end one.
Buying a time clock will likely cost you more money up front than leasing, but it does have its benefits.
"The main advantage of buying a time clock is that the company will not have to sustain any costs other than the retail cost of the system and regular maintenance," said Jacob Seiter, financial expert and CEO of My Best Wallets.
Owning a time clock gives you 100 percent autonomy over that device for the extent of its life cycle, and it means no monthly rental payments to worry about.
The biggest downfall of buying a time clock is the initial cost. If you do not have the cash up front to buy a time clock, this might not be the right choice for you. It is also important to consider the amount of money and energy you might spend on maintenance, as this is solely your responsibility.
Additionally, if the technology becomes outdated or your business needs change, you will be left searching for a new time clock.
When you should buy
If you have the money available up front, it is best to buy a time clock. If you only need one single economy clock, it wouldn't be worth the headache of remembering the monthly lease payments.
If you need to purchase a high-end time clock, it is best to buy from a company that is known for excellent customer service to ensure that your maintenance repairs are as seamless as possible. The amount you will save in monthly lease fees should be more than enough to cover maintenance costs.
If you know exactly which model you will need and don't intend on scaling, it is best to buy a time clock, as it will eventually pay for itself.
The other option is to lease your time clocks. This is a better option for some, but not everyone. Consider the cost, pros and cons associated with leasing a time clock.
A major difference between buying and leasing a time clock is the cost. Leasing a time clock comes with a perpetual monthly payment, as opposed to a one-time purchase.
"Each vendor will have a different pricing structure for additional services, like support and hosting fees, in addition to the monthly fee for the time clock," McColgan said.
The cost of leasing a time clock will vary by type, quality and provider. According to Squires, there are several ways a time clock lease can be structured. The leasing can be broken into hardware as a service (HaaS) or typical leasing structure.
Squires said HaaS, like cloud-hosted software as a service (SaaS), allows for a low barrier to entry into the market.
"It is a little different than [typical] leasing as it is a perpetual rent of the time clock at a fee that basically warrants the time clock for life," Squires said. "If you have a failed clock through normal wear and tear, the clock is replaced free of charge."
Estimated costs associated with leasing and HaaS, according to Squires, are:
- Lease: If a single clock is leased it most likely will not qualify for leasing.
- HaaS: $15 to $35 per month
- Lease: $1.00 buyout; 36 months: $35 to $60
- HaaS: $45 to $75 per month
- Lease: $1.00 buyout; 36 months: $60 to $95
- HaaS: $70 to $110 per month
Lease terms can be extended based upon quantity and total price.
Leasing a time clock is like leasing a car. It allows you the flexibility to choose something now, without consequences for wanting to change it later. This is especially beneficial if you foresee your business needs changing vastly over a short period of time.
"By leasing a time clock, the company will have to pay a monthly fee; however, most businesses leasing time clocks include maintenance and repairs in the contract," Seiter said. "It is also easier to change the system once it's outdated."
This means less stress when something goes wrong with your device. The flexibility and peace of mind alone may be enough for you to choose to lease.
Leasing a time clock may have a smaller price tag upfront, but it will cost you much more in the end. You are essentially paying a larger fee for the added convenience, new technology and routine maintenance.
If you are looking to acquire a large number of time clocks at once, leasing can result in unmanageable monthly fees. Leasing structures can often be more confusing than purchasing structures, which makes it hard for direct comparison for the exact time clock you might be considering.
When you should lease
If you aren't sure what type of time clock will be most beneficial for your company, or you think your needs will change over a short period of time, it is best to lease. This will give you the option to switch time clocks after your lease is over.
If you don't have enough money to outright buy the time clock you want, leasing gives you the option to acquire it without compromising.
Whether you are a first-time consumer, or you are looking to replace your current time clock, explore all your options. Your company size, industry type, documentation needs and security level will all factor into what type and quality time clock you need, as well as whether you should buy or lease it.