So you know you need a forklift for your business, but you are struggling to decide whether you need to buy or would be better off with short or long term rental. In our last post, we discussed the pros and cons of choosing to hire a forklift instead of purchasing a new one.

There are a number of factors that need to be taken into consideration, including required timeframe, type of forklift required and a variety of other variables. One of the points we touched on is the financial advantages and disadvantages of rental, and how this can make all the difference when it comes to making the right decision for your business.

Effectively Manage Cash Flow

Handling the books is a crucial element of running any business, and once-off purchases can often upset the delicate balance between cash coming in and cash going out. As opposed to the accounting inconsistency and complexity of making a large purchase that could reach into the tens of thousands, renting equipment allows you to simplify your budget and keep up with any other expenditure requirements without falling behind. On the other hand, the overall cost for rental can be higher than an outright purchase depending on the amount of use required. The predictable nature of fixed, regular payments gives you more room to breathe in the short term, while those with the means to buy might prefer to make a purchase and achieve a long term cost benefit.

Repayments Are Tax Deductible

For a business, spending on forklift rental is an expense that is tax deductible and negates the complications of owning a depreciating asset, particularly in regards to GST on an initial purchase price. The regularity of fixed payments helps keep your accounting processes simple in regards to both expenditure and tax deductions, giving you a better idea of how to effectively manage your capital. If you are unsure whether rental or purchase is the best option for your business when you need a forklift, get in touch with Eureka Forklifts in North Brisbane to have an obligation-free chat about your options. As always, this is generic information, and it is best to consult your accountant to receive advice relevant to your situation.