Developing an IT budget requires estimating costs for items such as maintenance, repairs, and upgrades. Fixed costs like internet access are easy to budget for, but it’s important to include a cushion for unexpected expenses and employee salaries. Previous fiscal year costs can help make better estimates.
Developing an IT budget may require more time and thought than other elements of your next year’s tax plan. While some costs are fixed, many will need to be estimated. For example, expenses like Internet access are easy to budget for, because you’ll likely have a fixed rate locked in. Repair and maintenance costs often need to be estimated, because you never know what equipment is going to break or need an upgrade. Plan to spend more time on your IT budget, because it can help prevent unpleasant surprises in the coming quarters.
The easiest items in your IT budget are fixed costs. These are all items that you know the price of and can find an almost exact figure on. Fixed cost items often include telephone, Internet and fax services. If you have a website, you will be able to figure out your domain hosting fees for the next year. So you’ll want to figure out the most expensive items in your IT budget. Try to determine if you’ll need new computers, network servers, or other technology upgrades. Be sure to include any anticipated technology upgrades and software updates. If you need to hire a specialist to install one of the new updates, include adequate funds for the job.
Maintenance and repair is another important aspect of IT budgets. While you can’t predict when a piece of technology will fail, you can be sure it will at some point in its life cycle. Make sure you err on the side of caution when it comes to maintenance and repair costs in your IT budget. Include money that will be set aside to pay for parts and money to pay a technician’s salary if needed. For each item you include in your budget, first look at your previous fiscal year’s costs to help you make better estimates.
Your IT budget should also include salaries for any employees who work on information technology for you. If some employees have planned salary increases, be sure to budget. If you have an IT department, you may need to account for overtime hours, as it may not be cost effective to perform upgrades or other maintenance tasks during normal business hours. Don’t forget to add a cushion for any new government mandates, such as taxes and additional health insurance costs.
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