Copier service contract types explained

Why the contract type matters

Two customers can pay the same amount per quarter on very different agreements, and leave the dealer with very different profits. The difference is in who carries the risk. On an all-inclusive contract, you carry the risk of heavy coverage, early part failures and extra visits. On a labour-only agreement, the customer carries most of it and you are paid for the time you spend.

Choosing the type is therefore a pricing decision, not a paperwork one. The right type depends on the machine’s age and volume, what the customer prints and how predictable their use is. Most independent dealers end up offering three or four types and matching them to the customer, rather than putting everyone on the same terms.

Cost-per-copy (click) agreements

The customer pays a rate per page, by counter, billed from meter readings. Mono and colour have separate rates; some agreements add rates for large-format pages or scans. Billing is usually quarterly in arrears, sometimes monthly for larger fleets.

Strictly, “cost per copy” describes how the agreement is billed, not what it includes. In UK practice it nearly always means toner, parts and labour are included, which overlaps with all-inclusive. The useful distinction is whether there is a fixed element as well as the per-page charge.

• For the dealer: revenue grows with use, and busy machines are the most profitable. Quiet machines can lose money without a minimum.
• For the customer: costs follow use, which is easy to budget per page but harder to budget per year if volumes swing.

All-inclusive service

Toner, parts, labour, travel and call-outs are all covered, normally through a click charge, sometimes through a fixed fee with an included volume. Preventive maintenance visits are part of the service. Paper and staples are excluded, and most agreements exclude damage, misuse, faults caused by non-approved consumables, network and driver configuration, and moving the machine.

The risk for the dealer is toner. Customers who do not pay for cartridges directly sometimes replace them at the first low warning, keep spares in a cupboard or take them home. Watch the ratio of cartridges sent to pages printed for each machine; our guide to automatic toner replenishment covers how to spot and stop it.

Parts and labour, toner excluded

You cover parts and labour; the customer buys toner, from you or elsewhere. Pricing is either a lower click charge or a fixed annual fee. This suits customers who want to control consumables spend, and dealers who would rather not carry toner risk on machines with very unpredictable coverage.

Be explicit about third-party and remanufactured toner. If a cartridge from another supplier damages a drum or developer unit, is the repair covered? Most dealers exclude it, or charge for the parts and cover the labour. Whatever you choose, it must be in writing before the first dispute, not after it.

Labour-only and pay-as-you-go

On a labour-only agreement, the customer pays a fixed fee that covers call-outs and labour, and pays for parts and toner as used. Pay-as-you-go has no agreement at all: each visit is charged at a call-out fee plus an hourly rate, with parts on top.

These are the right answer for older machines past their reliable life, for very low-volume devices and for customers who own their machine outright and want minimal commitment. They are also a sensible holding position when you take over a machine you have not serviced before and do not yet know how reliable it is.

Lease plus service

Many copiers placed with businesses are financed rather than bought outright. In a typical arrangement, a finance company buys the machine and leases it to the customer for a fixed term, commonly three to five years, while the dealer provides service under a separate agreement. The customer therefore has two contracts with two different parties, with different terms, notice periods and end dates.

Some dealers offer a single monthly payment that includes the lease and service with a copy allowance. This is simpler for the customer, but the two elements are still usually separate underneath. Make sure the customer understands which part they can change and which they cannot: ending the service agreement does not usually end the lease.

Upgrades and settlement

Upgrading a machine mid-lease normally means settling the remaining lease and starting a new one. Settlement figures and terms come from the finance company. Keep the lease end dates of your customers’ machines on record: they tell you when each customer will be looking at a replacement, and when a competitor will be calling them.

Minimum volumes, allowances and overages

These three terms are often confused. A minimum is the least the customer will pay per billing period, regardless of use. An allowance is a number of pages included in a fixed fee. An overage is the per-page rate charged for pages beyond the allowance.

Decide and write down whether unused allowance rolls over, whether allowances are per machine or pooled across the customer’s fleet, and whether mono and colour allowances are separate. Pooling is attractive to customers with several machines and costs you little if the overall volume is right.

The types side by side

Choosing the type for each customer

Three questions settle most cases. How much does the machine print? How old is it? How predictable is the customer’s use?

• A new machine printing 5,000 or more pages a month suits cost-per-copy, with a modest minimum.
• A machine printing a few hundred pages a month suits a fixed fee with a small allowance, or labour-only.
• A machine past its rated life, or one you have just taken over, suits labour-only or pay-as-you-go until you know its condition.
• A school with long holidays suits a pooled allowance across its machines, so quiet months balance busy terms.

What every agreement should state

Most disputes come from something the agreement did not say. Whatever the type, write down:

• Each machine by make, model and serial number, its site and its starting meter readings.
• The billing period, the billing date and whether billing is in advance or arrears.
• The rate for each counter (mono, colour, large format) and whether A3 counts as two clicks.
• Minimums, allowances, overage rates, rollover and pooling.
• What is included and what is excluded, including third-party consumables.
• Target response times, and whether they are targets or commitments.
• How readings are collected (remote monitoring, engineer, customer) and what happens when none arrives.
• The term, notice period and annual price review mechanism.

SubClik stores contract rates, included copies and what each contract covers, such as call-out, labour, travel or parts, and runs click billing from the machine’s meter readings. See contracts and billing, and our guide on setting click charges for building the rates themselves.