How to Budget for IT Expenses

New technology isn’t cheap, so it’s important to learn how to budget for IT expenses to keep your devices–and business–running smoothly. By weaving IT budget planning into next year’s estimate, you can get a rough idea of equipment and maintenance costs. That way, when something happens, you’re not left floundering with a broken computer and paying money that dips into other expense categories. Many companies overlook budgeting for IT expenses, and if you find yourself in this situation, don't worry. We’re here to help you create a much-needed IT expenses budget that covers you for years to come.

What is IT Budgeting?

If you’re new to the field, IT budgeting is setting aside money and other resources for information technology programs and assistance. IT strategy and budgeting is an essential part of making a business thrive. By having an IT budget in place, your technology stays up to date and you’ll be able to afford an expert tech team when problems arise (and they always do).

5-Step IT Budget Planning

Whether you’re planning out your whole year or learning how to budget for monthly IT expenses, our 5-step plan is an easy way to get started. With these IT budgeting best practices, you’ll be able to strategize your planning for the year (or month) with far less stress.

1. Strategize Based on IT History

As the saying goes, history repeats itself, so why wouldn’t the same mindset apply to your IT expense budget? The best way to determine how much you need for your expenses is to look to the past to figure out future spending. Here are some questions to ask yourself:

• Is there a similar expense pattern over the past few years?
• What are the high and low end of your expenses?
• Does your IT expense fluctuate frequently?
• Did any hiccups occur in past years?

After asking yourself these questions, use the information you gathered and apply it toward your budgeting IT expenses strategy for this coming year to help set new priorities and anticipate changes.

2. Establish Priorities and Company Goals

Knowing which parts of your strategy worked well the previous year helps create new priorities that align with your company goals. Keeping in mind any difficulties and things that went smoothly, you can use this information to establish your priorities and goals in the coming year. Think about what has worked well in the past, and consider that along with user experience opinions from employees to establish IT budgeting priorities for the coming year.

On top of that, having updated information and technology helps you stay ahead of your competition and accomplish yearly company goals. Consider using advanced data analytics, or business intelligence, to combine reports and give you an ongoing performance review. This helps determine successful and problematic areas in your company. This is all information to keep in mind when determining budgeting IT expenses for the year.

3. Identify One-Time and Recurring Expenses

Two distinctive areas to consider for IT expense budgeting are your recurring expenses and any one-time expenses that correlate with upcoming projects in the next year. Recurring expenses might include:

• Staff
• Network infrastructure
• Digital security
• Upgrading hardware and software
• New subscriptions
• Business applications
• Telecommunications
• Printing costs
• Tech accessories

Upcoming projects to consider:

• Large installs
• Moving offices
• Business expansion
• Digital upgrades

Keeping all your projects and expenses in mind can help you estimate properly and plan accordingly for the following year’s IT budget expenses.

4. Use Data and Technology

Your IT expenses budget proposal should be accompanied by data supporting your reasonings and recommendations for new technology. If you’re trying to launch a new system, make sure you can prove why it will work for your company with correlating stats. Going along with that, make sure your technology is up to date as well. Consider how new technologies can enhance your company to make certain processes easier and faster. By keeping in mind the reported data and newest technologies, completing your budget and showcasing its worth will be easier than ever.

5. Expect the Unexpected

Some of the biggest mistakes people make are trying to cut IT budgeting costs and anticipating a perfect year. You may think a particular training session is a waste of time and money, but it can lead to further problems later on when an employee makes a costly mistake that could have been avoided by the training. Another area where a faux pas often occurs is not expecting security issues and data breaches. It’s important to anticipate things like hacking, employee errors, and fraud, so you can implement precautionary measures in your company and have a pre-planned solution if it does happen.

Implementing Your IT Expense Budget

Now that you’ve reviewed our 5-step plan for learning how to budget IT expenses, it’s time to implement what you’ve learned and select an IT team to carry out your plans. If you’re interested in working with Premier IT, we offer a dedicated support team to manage all of your needs. Unsure if IT management services are the right fit? Check out our other article below.

→ Related Content: Are Managed IT Services Right for You?

Premier IT is a dedicated IT support team that manages all your technology needs. We pay attention to the details so you can focus on what you do best. We provide technical consulting, hosted infrastructure, computer & network support, security, Microsoft support, repairs, network monitoring and more. If your small business needs reliable technical support, contact our team of experienced technicians and engineers.