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Paying for ERP Software

Best Kept Secrets to Help Finance Your New ERP Solution

Fri, Dec 16, 2016 @ 05:08 PM / 0 Comments / in Microsoft Dynamics AX, Dynamics 365 for Operations, Cloud ERP SaaS, ERP Implementation, ERP Software, Microsoft Gold ERP CSP Dynamics Partner by Jennise Streaty

You know your business needs a better software that can be seamlessly used in every department. You may even have a good idea of what software you want to be implemented. Unfortunately, none of that matters when your company doesn’t have the right finances for the software you want. Before you hit the snooze button on your new ERP dreams finish reading this article, because we are going to let you in on a couple of secrets that could help you finance the project. 

Lease Corporation of America Financing

Lease Corporation of America (LCA) is offering a 12 Month 0% Financing Program to businesses that have been open for a minimum of 2 years. There must be a minimum monthly payment of $75 and a minimum equipment cost of $2,000.   

Benefits of Leasing

LCA's leasing programs also deliver the ability to include soft costs into the lease, keeping one monthly payment solution to sell to your customers. Soft costs include software, training, installation and programming; whatever necessary to build a complete computer system.

LCA's unique and competitive lease financing programs are designed for all types of IT infrastructure equipment, and include:

  • 100% software financing availability
  • Low lease rates for transactions $2,000 and up
  • New and refurbished equipment
  • 100% pre-funding available to approved vendors
  • "Soft" costs such as software, installation, training and maintenance can be included
  • Every situation is unique therefor check with LCA for more information on this program.

Section 179 Deductions for 2016

This should not be considered tax advice.  Always check with your tax professional in regards to your circumstances.

Imagine going to the store and spending $40 then, before you walk away, the cashier gives you $6.40 back and says, “Here, you can keep this”. Unfortunatly, that never happens in real life or does it? With a Section 179 Deduction, there are various ways your business can reduce the total cost of new equipment. Just like the cashier in the scenario stated earlier, the government hands your company some money back and says “You can keep this”. Section 179 of the IRS tax code allows businesses to even deduct the full amount of your purchase if the  equipment qualifies and/or software purchased or financed during the tax year. Why does the government do this? Basically, its purpose is to encourage business investments to stimulate the economy as well as helping businesses improve their profitability.

There are three ways Section 179 can reduce costs. Section179.org states that they are:

  1. 2016 Deduction Limit = $500,000
    This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2016, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2016.
  2. 2016 Spending Cap on equipment purchases = $2,000,000
    Two-million dollars is the maximum amount that can be spent on equipment for the Section 179 Deduction to become applicable to your company and begin to be reduced on a dollar-for-dollar basis. This spending cap makes Section 179 a true "small business tax incentive".
  3. Bonus Depreciation: 50% for 2016
    Bonus Depreciation is available for new equipment only and is generally taken after the Section 179 Spending Cap has been reached.

Check out this Section 179 Calculator on the LCA website:  https://www.leasecorp.com/179-tax-deduction/irs-179-calculator-2016.html 

Requirements for software

It has become increasingly popular to use IRS § 179 to purchase software. According to Section179.org,  you can use it on software that falls into these criteria:

For basic eligibility, the software must meet all the following general specifications:

  1. The software must be financed (only specific type leases or loans qualify), or purchased outright by you.
  2. The software must be used in your business for income-producing activity.
  3. The software must have a determinable useful life.
  4. The software must be expected to last more than one year.

In addition, these three specific stipulations must be met:

  1. The software must be readily available for purchase by the general public.
  2. The software must be subject to a non-exclusive license.
  3. The software must not have been substantially modified.

 Again, this should not be considered tax advice.  Always check with your tax professional in regards to your circumstances.

Contact Clients First for a software and services quote: Call 800-331-8382 or email sales@clientsfirst-tx.com

Sources: Section 179 Deduction, Section 179 for Software

 

Tags: Microsoft Dynamics AX, Dynamics 365 for Operations, Cloud ERP SaaS, ERP Implementation, ERP Software, Microsoft Gold ERP CSP Dynamics Partner