CapEx vs OpEx, Who wins....?

Posted by Ian Graham on Jan 23, 2019 10:30:00 AM
Ian Graham

CapEx-vs-OpEx

What is it and what does in mean in a business or corporation?

CapEx refers to capital expenditure while OpEx refers to an operational expenditure or operating expense.

Often CapEx’s and OpEx’s are managed in a business by two different budget holders, which can create competition between budget holders, as one budget’s saving can potentially be another budget holder’s loss.

Why is this relevant to Audio-Visual or Music for Business systems?

If you are responsible for procuring audio-visual equipment or music for business systems in your organisation, you probably have to make decisions in relation to hardware / warranty purchases and whether these are allocated as CapEX’s or OpEx’s.

For example, when buying a piece of capital equipment you may be faced with decisions to purchase warranties or not, at the same time deciding whether warranty and service parts costs should affect OpEx budgets and how much should be allocated to reduce impact on CapEx budgets.

"As an example, buying laser projectors in place of standard AV projectors may represent higher CapEx's initially, however with standard projectors requiring 8-10 replacement lamps in the same lifetime as laser projector, OpEx's for standard AV projectors will prove to be much higher"

Fortunately we have more than forty years of experience defining which Audio-Visual products require extended warranties and which don’t. We also understand fully how preventative maintenance of key products can improve longevity, thereby reducing future CapEx costs.

We use unique calculations to control total costs for each budget and ensure service and maintenance costs do not spiral out of control.

How can this benefit your business?

Perfect Octave's unique consultative and collaborative approach means we often manage to shave both budgets costs by up to 10%, satisfying both CapEx and OpEx budget holders requirement to optimise their budgets and achieve individual goals.

Our approach creates understanding between budget holders and allows all stakeholders to understand where hardware and warranty costs are allocated.

So whilst initially it may take time to investigate prior to purchase it always proves to be a valuable and worthwhile exercise and is something we can help and advise upon.

Are you looking to purchase Audio Visual or Music for Business Systems?

Contact us to see if your company's circumstances merit a free investigation so we can help you and your teams allocate costs correctly and start meeting budgets.

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Topics: Licensed Music