Top Tips for Maximizing Your 2022 Year-End Budget to its Full Potential
The end of the year is rapidly approaching, and IT departments that do not maximize their remaining budget risk having a lower budget next year. Often referred to as ‘use it or lose it,’ departments and managers that don’t maximize their year-end budget may be allocated lower amounts next year.
New budget calculations rely on the previous year’s spending, which is true for individual departments and entire organizations relying on outside funding.
This financial principle prompts managers to assess remaining budgets before the end of the year so they can spend any surplus and avoid working with a lower budget next year. So, for example, if an IT department has a remaining $10,000, that will likely be deducted from the allocation next year, as it’s assumed those funds aren’t necessary.
However, IT managers still need to be mindful and strategic when procuring new managed IT services, software, or hardware. Spending without tact may consume the surplus, but you’ll be left to pay for recurring purchases again next year. The same cost management practices you employ all year should still be considered.
Keep reading to learn why you should maximize spending in preparation for next year and how you can do so tactfully for the ultimate benefit of the organization.
Tactfully Maximize Your Budget Now to Retain Funding
Maximizing your budget ensures that you’ll receive a similar budget next year. Conversely, reporting a surplus this year signals that you were given too much money, and your department can operate with a smaller budget next year.
However, don’t make the mistake of spending frivolously. Strategically planning for next year’s needs keeps you focused on critical objectives rather than simply spending for the sake of spending.
Start pre-planning for next year while maximizing this year’s budget. Let’s discuss a few essential best practices to keep in mind as you explore ways to maximize your year-end budget:
- Prioritize mission-critical services: What is mission-critical right now, and what’s anticipated to become critical next year? For example, you might be looking to improve your security posture or better accommodate remote workers; explore vendors offering services that advance those goals.
- Consider secondary objectives: If we consider mission-critical goals top priority, what’s your second priority? You might not be able to find deals for mission-critical services, or closing the sale will take too long, but moving one step down opens up additional opportunities. Evaluate secondary and even tertiary objectives to spend any surplus while improving and advancing the organization’s goals.
- Look for deals: IT vendors often over deals near the end of the year or their fiscal year in an effort to pump up their sales figures. Since you’re looking for ways to maximize your surplus, keep an eye out for vendors offering special deals for managed services, software, or hardware you’ll need next year.
Ultimately, maximizing your year-end budget to avoid a smaller budget next year is essential, but it’s not a reason to spend on technologies you don’t need. Likewise, signing a contract for something that isn’t working towards key objectives creates an ongoing expense that simply isn’t worth it.
Instead, look for deals on mission-critical services or technologies that advance secondary objectives. Then, consider what you’ll need next year and make strategic purchase decisions.
Are You Aware of Upcoming Vendor Year-Ends?
An essential component of year-end budgeting is planning ahead for upcoming quarters. Fortunately, several major software and hardware vendors have upcoming fiscal year-ends. So if you’re considering acquiring any of these technologies, now is the time to do it.
Below are a few examples of Q1 year-ends from vendors. Check out our comprehensive year-end timeline report for additional details and vendors.
Software Q1 Year-Ends
Some major software vendors end their fiscal year in the first quarter of the year, including:
- MalwareBytes
- Okta
- RSA
- Red Hat
Hardware Q1 Year-Ends
Every business needs hardware, regardless of how much we migrate to the cloud. Some significant hardware vendors with Q1 year-ends are:
- Logitech
- Dell
- BlackBerry
- Rubrik
Partner with 3Quotes for Effective Year-End Planning
Maximizing your year-end budget while tactfully addressing core business needs and upcoming quarters is essential. However, cost management and year-end planning can be complex, especially when your organization is upgrading to new systems or seeking cost-effective options.
Fortunately, 3Quotes is an industry leader in IT procurement and budget planning. Our experts can help you navigate the intricacies to maximize your budget. Learn more about our guiding principles for IT budgeting and why it’s essential today.