Contracts are the bane of our existence and an absolute necessity. These long, boring, and confusing documents that bind companies and individuals together, especially for an ongoing service. No one actually likes to read these things (except maybe some lawyers): there are a lot of legal terms, long sentences and longer words. I say that as someone who's business depends on contracts!
If you're considering working with a managed print service (MPS) provider, then a printer contract is in your near future. While this post doesn't cover every single thing in an MPS contract, I want to highlight a few of the most important topics that you need to understand before you sign.
Contract Overview Details: Who, When, and What
Everyone should review the contract's details to double-check it's actually what you talked about with your MPS provider (misunderstandings and simple typos do happen). This is a simple, easy step since these details can be found either on the front page or on a separate schedule. As a bonus, this isn't the “fine print” and will be easy to read! Some areas you should consider:
- The contacts on the contract
- The payment periods and cost-per-page rates
- Overage rate and when overages will be billed (monthly, quarterly, etc.)
- How long is the contract for? (36 months, 60 months, etc.)
- Payment terms (Net 10, Net 30, etc.)
Before you sign a copier and printer maintenance contract, you should ask how invoices will work. A lot of companies have account receivable and account payable needs that should be worked out. Does your company have departmental codes so you can bill back for printing? When will the invoices come, what file format, and what is the delivery method? Make sure you work all the invoicing out now because normally you will see between 36 and 60 of these over the next few years so make sure you understand what you will be getting.
Is the MPS provider flexible on the covered pages? If you print under the monthly/quarterly/yearly agreed-upon volume, are you expected to pay for all those pages you didn’t actually print? Some providers, Lasers Resource included, will issue invoice credits for pages you don’t print. Ask if you are held to that static monthly volume or if you are just paying for what you print.
Terms and Conditions: The Meat of the Contract
If you're signing an MPS contract, odds are you had a print assessment. An experienced MPS provider will install a data collection agent (DCA) to report print volumes. The DCA will be used in reporting print volumes and supply levels to the MPS provider. Make sure that your IT team is on board with the DCA living on your network and that they understand what it will be doing. You can find more information on the DCA we use here. For those of you concerned with regulatory requirements, this is strictly a counting program – it doesn't know anything about what's on the pages being printed/copied.
No contract would be complete without listed out obligations for each party involved. Make sure you, your legal team, and/or anyone else affected in your company have read over the obligations. It is very easy to miss a little something like “Must notify MPS provider with all moves of devices.”These “little things” can be big when it comes to service, so they are important. For customers, these obligations are often easy and designed to help you get the most out of the contract. More importantly, read and make sure you understand what you're getting out of the contract – that's why you're having to read one of these beasts after all! Know what your MPS provider should be doing and hold them to it!
Speaking of what the MPS provider should be doing, make sure you read the section on service or the service level agreement (SLA). The SLA should state a variety of service expectations:
- What you can expect from a service call?
- Does the provider offer routine maintenance?
- Will they will be at your office in 4 or 8 hours?
- The hours of operation for service technicians
- The charge for service beyond what the contract covers
This is only a partial list that should be covered in this section. These are the rules governing the relationship between your two companies, so it's important that you agree on the SLAs and that you review that the SLAs you want are in the contract.
Think through all of your special document production needs and ask if those will be covered on the contract. Maybe you have unique supply needs. Banks use MICR toner for checks, marketing agencies have heavy-duty color needs, the list goes on. Often, things like staples for the printer, MICR toner, and miscellaneous consumables aren’t covered.
Most contracts are written for multiple years. As with most multiyear agreements, there is an “escalator” built into them. What an escalator does is increase your cost-per-page by a percentage on a set schedule. Some providers have escalators that can increase your monthly payment by 10-15%, making what seemed like the best deal at the time of signing the MOST expensive deal in the market.
Finally, you should look at that time frame where the contract expires. Know if the contract has an automatic renewal built into it and see what the terms of that are. Typically, if you do not want to have the contract renewed, you have to provide a written letter so many days before the term of the contract. Know when that window is and what is required.
If signing a 5-year contract seems scary to you, that's OK – it is! A contract is hard to get out of, Know the facts and don’t let yourself get caught in a bad relationship. Questions? We don’t blame you. Give us a call and we'll be happy to help you become better prepaired to sign a new MPS agreement.