Free up capital by not owning your IT
Increase flexibility and free up capital by paying a monthly fee instead of making large IT investments. Many companies are profitable but still need to free up capital to meet both growth and solvency targets.
- By avoiding large investments in IT, the money can instead be used to invest in the core business that better supports the company's growth objectives, says Mats Läckgren, CFO AddPro.
In recent years, the IT industry has seen major changes. In addition to the technological development of As A Service solutions, the financial and accounting aspects have also had a major impact on this type of business model. In a traditional business model, a financial investment is made in hardware, software and other components. This investment is charged to the balance sheet, which in turn affects working capital, liquidity and other financial ratios. For example, a deterioration in liquidity can lead to a company receiving a lower financial rating from various credit institutions.
Changed accounting rules set higher requirements
When the accounting rules (K2, K3 and IFRS) were changed a few years ago, the requirements for transparency in the way different elements are accounted for increased. For example, companies that are lessors must now present their finance leases as if they were hire purchase, i.e. as an asset and a liability, in the consolidated accounts. In addition, the cost must be split into different components in the consolidated income statement. This creates an advanced manual handling.
- Key figures and accounting are all well and good, but the most important factors are still operational benefits, security and control. Staying within budget, whether it's an ongoing operating budget or a project budget, is central to any business. By building different degrees of flexibility into a functional solution, it is possible to create better conditions for achieving these goals, says Henrik Lundgren, Head of AddPro As A Service.
Flexible function store provides better cost control
A flexible functional solution that is not considered as a finance lease is classified as OPEX (income statement) and not as CAPEX (balance sheet/investment). An OPEX treatment means that the cost of the period is treated as an expense directly in the income statement. In comparison, CAPEX management means that the total amount over the whole period is recorded in the balance sheet in different places and then depreciated over the life of the asset.
- The monthly cost can be controlled depending on how the parameters are set, such as number of users and volume. Instead of tying up money in a large investment with hardware and software and own staff included, the whole solution can be rented as a flexible functional solution. The advantage is that the business also has its own resources, which can instead focus on the core business," says Henrik Lundgren.
AddPro As A Service is AddPro's own finance company that specialises in turning high total costs into flexible monthly costs. AddPro As A Service also provides the ability to lift items from existing balance sheets into a new and flexible set-up.
Want to know more today? Welcome to contact us at solutions@addpro.se or read more about our service here
