Serviced Offices or Flexible Managed Offices (FMO)

What other advantages are there?

Cost:
Serviced offices are very good value. Studies by Reading University quantify that for businesses under 30 staff serviced offices are cheaper for all sizes of unit. When comparing serviced office costs with conventional leases it is important to consider that only 49% of total office costs are rents and rates (Total Office Costs Survey, Cass Business School). The True Cost of Flexible Offices survey, published by the Chartered Institute of Purchasing and Supply in 2001 found that “the fully inclusive nature of the serviced office can produce savings in virtually all scenarios, with a saving of up to an average of 78% being achieved over the total occupancy cost of conventional office space.” While the CIPS survey is a little out of date now it does indicate the considerable cost advantages.

Convenience:
For small companies in particular, the transparent and ‘all-in’ cost nature of a managed office is very attractive, as is the ability to walk in, sit down, and start work. Financial risk is limited to the notice period, three months, and there is no capital expenditure. In addition, the monthly bill is easy to budget for and there are no hidden extras or unwelcome surprises such as service charges or repair and maintenance costs.

Accounting Rules:
Changes to the accounting treatment of occupational leases under FRS 15/IAS 17, have made leases over five years in length substantially more onerous.


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