Paying for a PBX

Phone systems aren't cheap an how to pay for them is a common issue.

Very few PBX purchasers pay cash. Most lease the equipment. My knowledge of leases is limited but I can put in a few pointers. It is common for phone leases to allow for equipment upgrades by extending the life of the lease rather than increasing the monthly payments. A lease might allow for a $1 buyout or "fair market value" (FMV) buyout if you don't renew the lease. For the latter look for protections so the FMV isn't unreasonable. I've seen FMV for 5 year old computers that were higher than buying new computers. So read the fine print. There are many aspects of leases, such as tax issues, that I am ignorant.

Some PBX manufacturers and vendors will offer leases at very low interest or 0% interest so include lease costs into the cost of the entire system.

Hosted providers may offer special deals if you lease the hardware through them. They might offer free maintenance on the equipment during the lease period as long as you use their services.

We are using Tenant Improvement (TI) funds to pay for our new PBX. It is common to negotiate TI funds that can be used to improve the office when signing an office lease. TI funds are real money, but they are usually spent early in the lease. Unspent TI funds will disappear when the office lease expires. Normally these funds are used for construction work and on products that cannot be moved from the office. It is unusual to be allow to use TI funds for a phone system but our management negotiated a clause to allow for TI funds to be used to purchase a phone system. 

So we are in the rare position of paying cash for our phones. Our phone related operating costs —maintenance and carrier fees — will be lower than in 2013 than in 2012. A big win.

And there was competition for the TI funds. After I sent our the RFPs for the phone systems I discovered that we had contracted for additional construction work. I had to wait until the construction work budget was final because it would determine how much TI funds would be available for the phones. I ended up looking at another system in case I had to cut costs dramatically, and this delayed awarding of the PBX contract by a few weeks. Fortunately the TI funds available for the PBX were adequate to go with my first choice.