ITAD is becoming much more than just risk management or a precaution for business; it’s becoming standard and can even be viewed as a financial strategy. Corporate ITAD can be part of finance, ESG, and compliance, but the finance component is less well-known. With regulatory credits and incentives, there is an opportunity to offset ITAD costs. As a corporation, it’s ideal to understand what your ITAD practices affect your business and how they can benefit it. We are going to look into how ITAD is a financial strategy and what benefits regulatory credits and incentives bring.
What Are Regulatory Credits and Incentives?
When we talk about ITAD, certain regulations must be met during the ITAD process, which is where regulatory credits come in. These can include environmental, recycling, and compliance credits. Regulatory credits are awarded to companies that follow good practices in accordance with ITAD regulations. For example, regulatory credits can be awarded for responsible material recovery, certified destruction practices, and verified e-waste disposal outside of landfills. These credits are usually issued by state or provincial recycling programs and industry compliance frameworks. Incentives can include anything from grants, tax advantages, and rebates. These programs can differ based on the industry a corporation is in and the type of device being processed.
How Much ITAD Really Costs
ITAD is an essential part of business when working with technology and devices, but there is a cost to be aware of when using ITAD practices. Logistics, labor, data wiping, recycling fees, and chain of custody all have costs to consider for ITAD. Additionally, lost resale value, lost credits, and incentives all contribute to the cost of ITAD. It can be very difficult to calculate the cost of their ITAD processes because of how complex it is, but understanding a rough estimate can help you to prepare for that expense and figure out how regulatory credits and incentives can offset it.
How Staying Compliant Can Save You Money
Staying compliant can reduce financial exposure and be considered a “cost-avoidance ROI” because it saves you money. With compliance comes fees and penalties if you are noncompliant. If a company stays compliant, then they avoid penalties and fees, saving money in return. Some examples of financial consequences a company can avoid by staying compliant include fines and penalties, legal fees, and breach response costs, among others. When you stay compliant, you don’t run the risk of paying fines, penalties, and other fees associated with non-compliance, which can add extra expenses.
How Regulatory Credits Can Offset ITAD Cost
Regulatory credits, awarded when a company adheres to regulatory standards, can offset the cost of ITAD when considering the disposal process. ITAD is often seen as a necessary expense, but regulatory credits can offset the financial impact while rewarding companies for their responsible practices. Because these credits can be given in cash, rebates, and other financial benefits, the reward will help the company generate more revenue, replacing the cash spent on ITAD. This means that companies will be rewarded for their good behavior, including their efforts to be more environmentally friendly and make a positive environmental impact.
Tax Benefits From IT Asset Disposal
There is an added ITAD tax benefit that many companies may not know about or consider. IT equipment isn’t considered “waste” or “Traash” in the books of the company and especially in tax records. IT assets are considered assets for each company and can be written off if disposed of early. This is where a documented ITAD process is necessary to showcase the proof that the device is being disposed of. It is vital to keep records and documentation of every step of the iTAD process to ensure an accurate representation of the process and how the devices were disposed of.
How ESG Reporting Affects ITAD Processes
ESG is becoming something that companies are paying close attention to when making decisions behind the scenes. ESG affects many areas, including increasing investor confidence, strengthening enterprise partnerships, and building brand trust. ESG metrics supported by IT asset disposal include recycling volume, reuse volume, carbon avoidance, and hazardous-waste reduction. ESG reporting can create its own incentives when proper reporting and certification are in place, making it a financial and environmental benefit.
Mistakes to Avoid That Cause Credit Loss
There are several common mistakes companies should avoid, as they can lead to the loss of credits and incentives. These mistakes are common but avoidable, and knowing them can help you earn as many credits and incentives as possible.
No Documentation or Poor Documentation
It’s essential to properly document each stage of your ITAD process to remain compliant and meet regulatory standards. Missing serial numbers, no certificates, or an incomplete chain of custody can all cause problems.
Not Treating ITAD As Asset Disposal
ITAD isn’t just “Trash removal”; it is a process that includes reuse, recycling, and activities that are detrimental to data security. These assets need to be viewed as part of a necessary and important process within your company, not just as trash removal.
Choosing the Cheapest Vendor Choice
When you choose a vendor, it’s important to choose one that has all its certifications and is properly reporting its processes. Choosing based on vendor cost can lead to hiring vendors that are not certified, have weak reporting and compliance controls, or have unclear practices.
Not Planning Ahead
As a company, it’s important to plan your ITAD process. It’s not something to think about in the moment, when storage is full, and you have to implement a process. Having a plan ensures your team understands the process and that the reporting is consistent throughout every stage.
ITAD and Regulatory Credits and Incentives
ITAD is a necessary part of owning tech devices, and it’s an expense almost every company will incur. Luckily, there is a way to offset this cost through regulatory credits and incentives awarded when a company practices good governance and is responsible with its regulations and compliance standards. This makes for a company that is both environmentally sustainable and saves money on necessary ITAD processes. If you are a company with your own ITAD processes, it is beneficial to explore the regulatory credits and incentives you can receive to offset costs and boost revenue.
