Methods For Addressing Existing Inventory Levels When Implementing Managed Print Services (Cost Per Page) Programs

There are several methods of dealing with beginning inventory at the start of a Managed Print Services (cost per page) program. The important point is to not allow beginning inventory from being a barrier to getting started. You need to get your solution in place as soon as possible. Below are a couple of common approaches that can be utilized to address beginning inventory. These will help to remove any barriers from moving forward, and can help expedite implementation. See which works best in a particular situation and know that you can come up with any hybrid that meets your customer’s needs and helps to move the deal forward.

* Page Credits:

Under this scenario, you would add up all the remaining on site inventory and provide the customer with a credit in future pages printed. These credits can be spread over any number of their future invoices. For example, the credit may be 100,000 pages and the customer prints approximately 500,000 pages per month; you may issue them a 25,000 page credit against their next four (4) months invoices.

Calculating Page Credits:

Take the total number of toners per cartridge class and times it by the credits you agree to give per cartridge. Take the total value of each of those classes and divide that dollar amount by the per page rate agreed upon. That will yield you a page credit per class. By then adding up all the class page credits, you will now have the total beginning inventory credit. Now you need to decide over what period of time you wish to spread these credits out and present this to your customer. This process will be viewed as very fair by your customer, remove any obstacles to moving forward immediately, and prove to be an easy transition for both you and you customer.

* Inventory Valuation:

Another method is to take an inventory valuation and agree that at the end of the contract term. Should the contract not be renewed, that you will leave them with an equivalent valuation of inventory?

* Discounted Dollar credit:

Some may wish for you to come up with an upfront dollar credit verses a page credit. This is typically accomplished by taking the total cartridges in stock, per class, and then agreeing on a fair per cartridge credit amount, and then issuing them a credit to be applied over some number of future invoices. This is less attractive and a harder figure to agree upon. The customer will typically want a credit equal to the amount they paid for the cartridges; you, on the other hand are being asked to except cartridges that you have no idea as to their level of quality or control over some, possibly inflated price that they may have paid. As the title suggests, a Discounted Dollar Credit will usually work best when all can agree on a discounted per cartridge credit that is fair to both parties.