Deciphering copier and printer invoices can be an incredibly difficult undertaking. This is one area of the business where you as a business owner need to understand that there is complexity and annually, your rates are subject to rate escalators.
Contract Escalators Deconstructed
Contract cost creep in the copier and printer world is a real issue for businesses. For example, most companies have no idea that their copier and printer agreements typically have annual escalators in them. This means every year, the service provider has the authority to raise your base rates by 10%-20%. The result of this behavior is a compounded increase in expense and it is hidden in plain sight.
To illustrate, using the average escalator of 15% per year for 5 years means that if you began your copier/printer maintenance contract with a rate of $.01 per page as your service rate, at the end of each year, your rate would escalate as follows:
- End of Year 1: $.0115
- End of Year 2: $.0132
- End of Year 3: $.0152
- End of Year 4: $.01748
- End of Year 5: $.02
So what may have seemed like the best and most competitive rate at the beginning of your contract, increased by 74% by the end of the 5th year. We suggest you check your agreements to see what your annual escalator is, because we’re betting you lunch that you have one.
Getting the Help of Professional Cost Recovery Experts
At FPR, cost escalators are not a standard part of our agreements. When we contract with our clients, we fix those costs for the life of our agreements. Reach out to us today to see how we can help you. Also, you can learn more about FPR and how we help our clients by visiting our About Us page.
About FPR
FPR is a privately-held North American-based consulting, technology services and outsourcing company. Through our industry-unique VISIONAnalysis™ process, we have successfully combined unparalleled expertise and comprehensive intelligence to deliver significant value and cost management to our clients. FPR collaborates with its clients to help them achieve high performance.
For more information, please feel free to contact Mr. Brent Newton at FPR at (972) 650-0700.