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REGION: INTERNATIONAL
WHY PAY PER USE?

Five good reasons in favor of pay per use models

Every company is familiar with unit cost accounting. Why financing per item makes sense too.

1. Because return on investment cannot always be predicted, especially with innovative projects.

Pay per use allows both costs and ROI to be broken down by manufactured unit, which means that ROI is there from day one and can be entered in the books.

 

2. Because the market will not wait, but capital investment budgets are finite.

The growing use of digital technologies means companies need to get their act together – delays to innovations can mean they arrive too late. Budgets and balance sheets can be overstretched by necessary capital investment, but by linking it to the manufactured units, it is possible to cover more than one innovation program at once.

 

3. Because five-year plans do not work.

Capital investment relies on projections and assumptions. But what happens if larger production facilities are needed unexpectedly, or at a new site? Pay per use offers the flexibility to change plans at short notice.

 

4. Because the financing partner is responsible for the profitability calculation.

Arranging financing without any prior experience is risky, so having an experienced funding partner soon pays for itself. A partner that sits on your side of the negotiating table when it comes to procurement. A partner that is able to calculate the price for international projects and is willing to take on a certain amount of risk.

 

5. Because your finance and accounting departments and your shareholders will be grateful.

Using pay per use to drive innovation while protecting the balance sheet will increase your popularity with your finance and accounting departments for years to come – it can take around five years for industrial plant to show a return on investment. That is five balance sheets and five risk reports. And five good reasons to consider pay per use.

 

CONTACT ME NOW!

I am looking forward to talking about pay per use models with you.

Uwe Sorgenfrei

Regional Service Manager, Public Sector

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