It’s easy to feel confident about your IT budget in January. Everything’s perfectly organized and approved, and you have a clear picture of what the next 12 months of technology expenses will look like. Now you can focus on your work and not worry too much about tech until your next budget conversation or quarterly business review, right?
Suddenly, it’s summer. Four laptops have failed, new employees have pushed up your storage costs and somehow all of your software renewals have gone up 20% even though you didn’t add anything new.
In comes the inevitable question: “Why didn’t we know about this?”
It’s one of the hardest questions to get as an IT provider because the answer is usually, “You did know. Or you should have.”
Surprise technology expenses are often predictable months before an invoice arrives. Here are four common budgeting mistakes that, if not remedied, can turn foreseeable, simple expenses into costly problems.
1. You budget by looking in the rearview mirror
The easiest and most mistake-prone budgeting strategy is looking at how much you spent last year and assuming you’ll spend the same amount in the next one. It’s simple, and past costs can be a great starting point or expectation-setter, but that’s not forecasting.
A useful budget looks at where your business is today and what it will need in the months ahead. Information from 12 months ago can tell you only so much.
Last year’s spending is a rearview mirror, not a road map. It doesn’t show you anything of value about where you’re at or where you’re going. Before you finalize a total cost for next year, look at aging equipment, upcoming renewals, staffing plans and business initiatives. Once you have that information, you can build next year’s budget around what’s ahead instead of what already happened.
2. “It still works” is your replacement strategy
There’s always one computer. It’s loud, the battery runs out all the time and even the simplest programs start to stall and freeze when you open them. If you’re unlucky enough to be the owner of this sort of computer, you build habits and processes around its failures and shortcomings (and you should probably make sure it’s still on the charger).
“It still works,” you say. But how long will it keep going when it’s already on its last leg?
“It still works” is a very low standard for something needed to get anything done. When these struggling computers finally give out, what could have been a planned expense becomes a race to buy a new computer as quickly as possible, and that kind of speed is not cheap.
3. You treat renewals like autopilot
Autopay and auto-renewal options are baked into nearly every recurring cost these days. They save you from having to remember another due date, but they can also mean subscriptions stick around long after you meant to cancel them.
Just because subscriptions are guaranteed to renew doesn’t mean they should: You may no longer need it, not know who’s using it or if it’s even worth the money anymore.
Put renewal reminders on your calendar and review them before the auto-renew date. You may find you’re still paying for a cloud storage account belonging to an employee who left two years ago or another expense that no longer needs a place in next year’s budget.
4. Your growth plan and IT budget have never met
One week in December has a meeting on the schedule for “Next Year’s Leadership Plan.” The week after, another meeting pops up for “Next Year’s IT Plan.” Separating these two meetings keeps technology discussions from factoring into general leadership initiatives and leaves technology decision-makers guessing about the direction the business is going.
New employees, expansion, hybrid and remote schedules all come with technology costs, planning needs and security considerations. If these conversations are happening separately, the costs will meet on an invoice when you least expect it.
Bringing these conversations together lets you plan for growth as one unified team. If you know where the company wants to go, you can start estimating what technology will be needed to support the business today and where it’s headed next.
A good IT budget shouldn’t have surprises
When you see replacements, renewals, security needs and growth-related expenses ahead of time, you can build an IT budget that works with your business and gives you realistic insight into what is coming in the new year, free of pitfalls and mistakes.
What’s hiding in your IT forecast?
The right IT budget can’t magically predict the future, but it can give you the fewest chances to say, “I didn’t see that one coming.”
Want a clearer picture of what your technology expenses could look like next year? Schedule a 10-minute discovery call and we’ll help you identify what may be on the horizon.
Call us at or visit our website https://www.ez-netsys.net/about-us/contact-us/.
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