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Best Kept Secrets to Help Finance Your New ERP Solution

Dec 16, 2016 12:00:00 AM / 0 Comments / in ERP Implementation, Dynamics 365 for Operations, Cloud ERP SaaS, Microsoft Dynamics AX, ERP Software, Microsoft Gold ERP CSP Dynamics Partner by Jennise Streaty

Paying for ERP Software

You know that your business needs better software that can be used seamlessly in every department. You may even have a good idea of what software you want to implement. Unfortunately, none of that matters when your company doesn’t have the 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, basically whatever is 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, therefore 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 with regards to your particular circumstances.

Imagine going to the store and spending $40, then, before you walk away, the cashier gives you $6.40 back and tells you to keep it.  Unfortunately, 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, the government hands your company some money back and says “You can keep this”.  Section 179 of the IRS tax code even allows businesses to deduct the full amount of their purchase if the equipment qualifies, and/or the software was purchased or financed during the tax year. Why does the government do this? Basically, its purpose is to encourage business investments in order to stimulate the economy, as well as to help businesses improve their profitability.

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

  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/finance/irs-179-tax-credit.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 under 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 with 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: ERP Implementation, Dynamics 365 for Operations, Cloud ERP SaaS, Microsoft Dynamics AX, ERP Software, Microsoft Gold ERP CSP Dynamics Partner

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