How to Pay for Expensive AV Upgrades: CapEx vs OpEx Explained

Chris Gore
10 hours ago
7 min read

Published by SPOR Group | SPOR Learning Centre | wearespor.com/learningcentre

Office AV does not come cheap. A single meeting room fitted properly with a display, camera, audio system, and control panel can cost £8,000 to £25,000 depending on the technology and room size. Multiply that across a floor, a building, or a full fit-out, and you are quickly looking at six figures.

The cost is real. But so is the need. Poorly equipped meeting rooms cost organisations far more in lost productivity, failed calls, and technology frustration than the hardware ever would. The question is not whether to invest. The question is how to pay for it.

This guide explains the two main routes, paying upfront (CapEx) versus spreading the cost (OpEx or equipment financing) and walks you through exactly how each one works in practice. There is no agenda here. Both routes are legitimate. The right one depends on your organisation's financial position, how your board treats capital expenditure, and how long you expect the technology to last. This is how to pay for AV upgrades....

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First: Know What You Are Actually Budgeting For

Before you can decide how to pay, you need to know what the number is. AV projects vary enormously in scope, and the biggest mistake organisations make is underestimating the full project cost.

A typical AV fit-out includes:

Displays, screens, or video walls
Video conferencing cameras and codecs
Microphones and audio processing (ceiling arrays, speaker bars, or distributed audio)
Control systems, touchpanels, room booking panels, automation
Cabling, infrastructure, and network configuration
Installation labour and project management
Configuration and commissioning (making it actually work)
Training for staff and IT teams
Ongoing support and maintenance

A common mistake is scoping for hardware only and ignoring installation, configuration, and support costs, which can easily add 30–50% to the hardware price. Before you go anywhere near a finance conversation, get a clear project scope. Our guide on why you need an AV brief explains how to build one properly before you approach suppliers.

Rough cost benchmarks (UK, 2025)

Small meeting room (4–6 people): £8,000 – £18,000

Medium boardroom (10–14 people): £20,000 – £45,000

Large boardroom / executive suite: £45,000 – £100,000+

Full floor fit-out (10+ rooms): £150,000 – £500,000+

All figures include installation, configuration, and commissioning.

Option 1: Capital Expenditure (CapEx)

CapEx means paying for the AV project upfront from your organisation's capital budget. The assets, screens, cameras, control systems, are purchased, owned, and depreciated over time on your balance sheet.

How it works

You raise a capital expenditure request, get it approved through your finance and procurement process, and the supplier is paid in full on project completion (or sometimes in staged payments during a large project). The assets sit on your balance sheet as fixed assets and depreciate over their useful life, typically three to seven years for AV equipment.

The tax position

In the UK, businesses can claim capital allowances on AV equipment. Through the Annual Investment Allowance (AIA), most organisations can deduct the full cost of qualifying plant and machinery in the year of purchase, up to the current AIA limit, which has been £1 million since 2023. That makes the tax position for CapEx relatively straightforward for most fit-out budgets.

Always confirm the current position with your finance team or accountant, as capital allowance rules can change in each budget.

When CapEx makes sense

You have capital budget available and the project has been planned well in advance
Your organisation prefers to own assets outright
You expect to hold the technology for a long time (5+ years)
You want the simplest accounting treatment with no ongoing financing obligations
Your finance team treats AV infrastructure as a standard capital project

Capex vs Opex breakdown

Option 2: Operational Expenditure (OpEx) — Spreading the Cost

OpEx in the context of AV means financing the project so that the cost is spread as a monthly payment rather than a single capital hit. This is commonly done through equipment leasing or a managed service agreement that bundles hardware, installation, and support into a single monthly fee.

There are several structures that fall under this umbrella:

Finance lease

You pay a fixed monthly amount over an agreed term (typically 24 to 60 months). At the end of the term, you can continue paying a nominal rental, return the equipment, or purchase it. The equipment sits on your balance sheet, but the monthly payments are a financing cost rather than capital expenditure.

Operating lease

Similar to a finance lease, but the lessor (finance company) retains ownership throughout. Monthly payments are typically treated as an operating expense, meaning they come off the P&L rather than the balance sheet. This is often the preferred route for finance directors who want to preserve balance sheet capacity.

Managed service / Technology as a Service (TaaS)

Some AV integrators, including SPOR, offer agreements that bundle the hardware, installation, ongoing support, and monitoring into a single monthly payment. This is particularly useful for organisations managing large AV estates across multiple sites, as it converts an unpredictable capital project into a predictable operating cost.

If you want to see what this looks like in practice at the smaller end, our post on setting up a Microsoft Teams Room for under £5,000 shows a real proposal with full costs broken down.

When OpEx / financing makes sense

You do not have capital budget available but the business need is urgent
You are fitting out multiple rooms or sites and the total cost is too large to absorb in one year
Your CFO or finance director prefers to keep large purchases off the balance sheet
You want to include support and maintenance in a predictable monthly cost
You anticipate needing to upgrade the technology in 3–4 years and want flexibility to do so

Capex vs Opex cant be done by debit card.

Unfortunately you cant pay by debit card.

CapEx vs OpEx at a Glance

Factor	CapEx	OpEx / Finance
Upfront cost	High — full project cost	Low — first payment only
Balance sheet impact	Asset added; depreciates	Revenue expense; off balance sheet (operating lease)
Cash flow	Single hit	Spread over 24–60 months
Tax treatment	Capital allowances over time	Monthly payments often fully deductible
Ownership	Yours from day one	Depends on agreement type
Flexibility	Fixed once purchased	Some agreements include refresh/upgrade options
Best for	Organisations with cash reserves and long AV lifecycles	Organisations preserving cash or managing multiple fit-out costs

How to Actually Set Up AV Financing — Step by Step

If you have decided that financing (OpEx) is the right route, here is how to make it happen in practice.

Get a detailed project specification and cost breakdown

A finance company will not structure a lease against a vague quote. You need a full scope document with itemised costs for hardware, installation, and any support services. This is also what you need to compare suppliers fairly.

Speak to your finance team before approaching suppliers

Find out whether your organisation has an existing relationship with a leasing or asset finance company. Many larger organisations have preferred finance providers. Your finance director will also have a view on how they want the lease structured, on or off balance sheet and what term length works for the organisation's planning cycle.

Choose your lease term carefully

AV equipment typically has a useful life of five to seven years. A 36-month lease gives you a good balance between affordable monthly payments and a refresh point before the technology feels dated. A 60-month lease reduces monthly costs but increases the risk that you are still paying for equipment that needs replacing.

Understand what happens at the end of the term

This is where many organisations trip up. With a finance lease, you need to exercise an option, return, renew, or purchase. With an operating lease, the equipment typically goes back. Make sure this is clear in the agreement before you sign, and plan the refresh cycle into your technology roadmap.

Ask your AV supplier whether they offer direct financing options

Some AV integrators have partnerships with asset finance companies and can arrange financing directly as part of the project proposal. This can simplify the process significantly, as you are dealing with one supplier rather than coordinating between an integrator and a separate finance house.

Factor in VAT

Under most finance leases in the UK, VAT is charged on each monthly payment rather than upfront on the full project value. This can improve cash flow significantly on large projects. Your finance team will need to confirm how your organisation recovers VAT.

Get the agreement reviewed before signing

Equipment finance agreements are legally binding contracts. Early termination is typically expensive. Make sure the term length, end-of-term options, maintenance responsibilities, and insurance obligations are all clear before you commit.

Capex vs Opex should not get in the way of productive meetings

Dont let financing get in the way of conducting effective meetings

A Practical Example

Scenario: 10-room office fit-out

Total project cost: £180,000 (hardware, installation, configuration, first year support)

CapEx route: £180,000 paid throughout project stages. Depreciated over 5 years. AIA claim in year one reduces net cost significantly if tax position allows.

Finance lease (36 months): Approximately £5,200 – £5,800/month depending on the lessor rate. Total cost over term: approximately £190,000 – £210,000. VAT on monthly payments rather than upfront.

Operating lease (36 months): Similar monthly cost. Equipment returns at end of term. Full monthly payments potentially deductible as operating expense.

Managed service (36 months): Approximately £6,000 – £7,500/month depending on scope, bundling hardware, installation, and full ongoing support and monitoring. Single supplier relationship. No separate maintenance contract required.

Note: figures above are illustrative. Actual lease rates depend on your credit profile, the lessor, and market conditions at the time of the agreement.

Not Sure What Your AV Upgrade Will Cost?

Use our free pricing estimator to get a realistic budget in minutes — before you speak to a single supplier.