The season for putting together your 2022 IT budget is here. That means it’s time to start thinking about your company’s priorities, aligning your spending with said priorities, and figuring out areas to invest in to support growth and minimize risk. Like last year, there are still a lot of uncertainties to account for, which can make building an IT budget difficult. But a little preparation can go a long way.
Creating an IT budget is one of the most important financial habits for a business. It allows your company to control your spending, track your expenses, and save more money. Additionally, budgeting can help you make better financial decisions for the future and stay focused on long-term financial goals. As a result, you’re less likely to run out of money for the things you need.
Similar to budgeting for other parts of your business, there are various IT department costs you need to be aware of. To make the process a little easier, you can take a look at the current efficiency of your IT program’s spending. The type and size of your company, competitive pressures, and internal culture should also be factored in.
Here are a few other preparation tips you can use to create an accurate budget.
The person in charge of financial planning for your organization is the chief financial officer (CFO). Your CFO is responsible for ensuring that money is always going where it’s needed the most. By leveraging the information they have access to, they try their best to accurately divvy up funding for each department according to their actual needs.
When it comes to departments like sales or human resources, it’s easy to see how resources are being managed. The same can’t be said for your IT department. How IT is used requires specific knowledge your CFO may not have, making it hard for them to understand how costs are determined. Before they give your IT team the funding it needs, your CFO is going to want to know how the money will be spent.
If you want your IT department to have the funding it deserves, you need to get your CFO on the same page. Accomplishing this goal is as simple as explaining your job, how you expect to use the money, and how it benefits the company. This provides the necessary justification for the money being put into IT.
Before you start creating your budget, think about things from the CFO’s perspective. Does your CFO think the company has spent too much on improving your office’s IT? Are they more interested in future IT spending? Or maybe they think it’s more appropriate to funnel money into a different part of the company that’s been underfunded?
If you’re unable to answer questions like these, you can’t design a budget that would make sense for your CFO. The more it sounds like you’re simply throwing out suggestions, the more likely your CFO is to reject your ideas.
Financial planning is often done early in the year, with a mid-year spending review to follow. But that doesn’t mean you have to stop planning after the review is done. In fact, you can see even greater benefit from continuing to plan. Doing so can give you a better idea of what areas of your department are likely to pass and which may undershoot their original budget. This can also make it easier to forecast spending in greater detail for the rest of the year.
Make IT budgeting easy with the help of RCS Secure. We’re a leading managed services provider that specializes in all areas related to IT, and we can handle all of your IT needs. Since you only pay a low monthly price, budgeting is always predictable.
If you’d like to learn more about RCS Secure and our services, contact us today.
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