In a recent blog I wrote about the problems of buying or selling equipment at the end of a lease (see “2 Must Know Safeguards When You Purchase Equipment at Lease End“).  I reminded companies that sell used equipment to document the sale carefully. The bill of sale should always include the unit’s serial number.
 
Michael J. Roth, C.P.M., A.P.P., Director of Purchasing at Magellan Health Services, Inc. (http://www.magellanhealth.com/), shared a great tool he developed when his company sells used equipment. Mike confirmed that proper documentation of all sales has saved him from problems numerous times.

Mike explained, “Because some electronics are considered hazardous waste under Federal laws, and because many states have additional laws which mandate recycling of electronic components, we try to help protect our company by using this simple form when selling or donating any used equipment. “We do not want to take the chance on items showing up in landfills with our company name attached to them so we require the buyer guarantee that they will dispose of the equipment properly even if this requires that they pay to have it recycled.”

Mike’s 5 Essential Documentation Tips

1. The buyer pays all freight cost and the terms are FOB, seller’s location.
2. The buyer assumes all delivery risk, shipping expenses and insurance cost.
3. The equipment is sold “as-is” with no warranties.
4. The seller assesses and collects the applicable sales, use or excise taxes and remits to the proper taxing authority.
5. The buyer will properly dispose of all equipment when they are ready to dispose of it. This includes all state, federal and environmental laws. This may include proper recycling.

Mike attaches a completed Equipment Sales Agreement form to copies of all equipment related documentation for the specific asset. The form becomes a part of the asset permanent documentation.

To receive a complimentary copy of Mike’s Equipment Sales Agreement form, request it here on my blog. Mike has generously allowed us to share it with you. (We hate spam and will never share your information!)