Manufacturers & Distributors ARTICLE -
Strategies for Shrinking Your Conveyor’s Lifetime Cost
Target Audience: Manufacturing and Distributing Companies, M&D Industry
A conveyor is one of the most vital pieces of manufacturing equipment — and one of the most expensive. Understand the total cost of your conveyor, and you’ll get the biggest bang for your buck.
Your conveyor’s cost goes well beyond its initial price tag, because installation, maintenance and energy usage also chip away at your bottom line. Buying a conveyor that meets your needs and maintaining it properly can extend the system’s life and save you money.
When you shop for a new conveyor, consider your facility’s configuration and throughput requirements. Investing more in certain features, such as a decentralized drive or an energy-efficient power train, may pay off through increased productivity and reduced operational costs. You’ll also want to consider the system’s flexibility. Conveyors that you can adapt to different-size loads without hiring outside help can slash your costs.
After you buy a system, configure the controls to save even more. Use your conveyor’s sleep feature during down times to cut electricity use, and ramp down your conveyor’s speed when possible to save electricity and reduce costly wear and tear.
Current tax deductions can shave additional dollars off your conveyor’s cost. Under the Tax Relief Act of 2010, you can deduct 100% of the cost of equipment purchased in 2011, instead of deducting it over the equipment’s lifetime. Qualified purchases include new equipment with a lifespan of less than 20 years.
For equipment purchased in 2012, you can deduct 50% of the equipment’s cost. Manufacturers that operate as corporations can accelerate their alternative minimum tax credits instead of claiming bonus depreciation for their conveyor purchases. If your total annual equipment spending is less than $500,000, you also can use Section 179 expensing rules to deduct up to $125,000 of your conveyor’s cost from your 2012 taxes.
Find out how our M&D accountants can add value to your business. Email us or call us at 1 (888) 875-9770.
related links
M&D Newsletters & Articles
Tax Services
Audit Assurance and Accounting
Industries
Tax and Business Updates |
