A lot of what the future holds for a business depends on how it prepares ahead during the end of a financial year. Let us remind ourselves that the financial year starts on July 1 and ends on 30 June every year. Companies must understand tax brackets, how tax is calculated in Australia and, most importantly, means to save tax. With that as the foundation, businesses need to go over financial statements for tax deductions, lodge tax returns, ensure tax compliance, and plan investments for the next accounting year. Smart planning as the Australian financial year end is also critical to strengthening the IT infrastructure for a business.
“A recent forecast by Gartner reveals that Australia’s IT spending is set to soar to an impressive A$146.85 billion in 2025, a substantial 8.7% increase from” – IT masters.
This potentially overwhelming period can become an opportunity to assess your business’s technical infrastructure and how it can contribute to your overall growth.
Beyond tax brackets: Plan to spend on IT services.
Today all businesses rely on technology systems — regardless of size or industry, and therefore a well-crafted IT services budget is crucial. Technology spending today has evolved into a huge influence on the ability of a business to operate and compete. The process of IT budgeting as the Australian financial year ends can ensure investments align with business goals as well as introduce more transparency into IT spending, thus maximising the value of such investments. Here is a broad guideline on how this can be broken down:
Infrastructure and Hardware: this is for servers, workstations, network firewalls, switches, wireless, etc.
- Software licences and subscriptions – all businesses use a basic CRM right up to specialised industry software, and hence this forms a recurring cost. Consider potential new software purchases for the coming year.
- The most sought-after cloud services! Account for cloud storage, backup, and disaster recovery and Software as a Service (SaaS) in your budget.
- Investing in robust cybersecurity measures, which include firewalls, antivirus, endpoint detection & response applications, multi-factor authentication, managed detection & response, and security training, is important.
- IT support and staffing expenses play a role here; whether you function with an in-house IT team or outsource salaries, training, and potential hiring must be included.
Setting aside an amount for new projects, innovations, or IT initiatives that can be undertaken in the upcoming year can be lucrative in the long run.
Business benefits obtained
Here is how effective IT budgeting can accelerate improved business performance and outcomes:
- Optimised IT costs: A comprehensive IT budget lays the road for the spending plan for the next financial year. This helps businesses keep costs in check with planned allocations. The budgeting process can also be used to identify and reallocate not-so-important expenses elsewhere where they are more sought.
- Better business cost management for increased business efficiency that is mindful of systems, people and processes is one of the primary avenues.
- Head towards clear and informed decision-making with the help of detailed cost analysis. IT budgets can help IT departments ensure that they have the right resources in place to help maintain continuous IT service delivery.
- Better resource allocation using a collaborative IT budgeting approach. This involves key stakeholders who ensure that resources stay tightly focused on achieving business priorities.
- Increased transparency that highlights IT priorities and spending for the whole organisation so that the team understands resource allocation and its impact on overall business performance.
- Proactive handling of resource allocation can guarantee funding for critical IT investments, such as technology upgrades, cloud migrations and other cybersecurity expenses. This acts as a guarantee to complete critical initiatives, even when management attention is diverted to other emerging issues.
- Greater ability to manage IT performance by creating a way to compare actual expenses against budgeted costs. It also presents numerous benchmarking opportunities, such as setting up a comparison of internal IT spending and comparing their expenditures to the IT spending of others in their industry.
Conclusion: Audit your IT budget before the end of the financial year
- Compare actual spending against what was planned across segments like hardware, software, cloud, cybersecurity, and consulting services.
- Identify areas of overspending and those that were underutilised or had duplicate services.
- Now systematically evaluate the return on investment (ROI) of key purchases or upgrades of IT services.
- Get rid of those licenses that were unused, retired or completely abandoned.
Preparing for an IT services budget just as the financial year can be complex, particularly in today’s dynamic, technology-fuelled business environment. Getting started with the right partner can effectively set the ball rolling towards an IT budgeting system that supports overall growth. Reach out to us for a consultation.
