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IT Budgeting and Asset Depreciation for IT Professionals

March 8, 2018
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When it comes to IT Budgeting and the current assets in your organization (i.e. computers, software etc.), it’s usually a challenge for IT Professionals to work alongside the accounting department. In many cases IT Professionals don’t have experience or expertise in IT Asset Depreciation. Yes! Asset Depreciation, you might be scratching your head wondering why do I care about depreciation? It’s very simple. All IT equipment: laptops, desktops, monitors, printers, peripherals and other items lose value over time.Understanding how depreciation is calculated is very time consuming and difficult if you are not familiar with accounting principles. Many of my colleagues in the IT sector that I have collaborated with attempt to avoid asset depreciation all together and seek the look to the accounting team for help. Since starting at Centage Corporation, a provider of SaaS-based budgeting, forecasting, reporting and analytics tools, I have taken advantage of the Asset Module within our flagship product Planning Maestro, to calculate the depreciation of our IT equipment.

With Planning Maestro, it’s incredibly simple because of the financial logic that is built into the tool. All I need to do is plug in a few fields – such as department, cost, date equipment went into use, etc. –manually or by an Excel import template.Within the tool you can set up how many of the same computers did I buy this time?  How much was each computer? When did I buy them versus when did I put them into service? Maybe I’m building a new cluster of servers but they won’t be online for 60 days. Do I use a 3-year, or 5-year depreciation? Knowing how to properly depreciate the equipment is essential to the organizations capital budget, but also its operating costs.I love to use Spiceworks Helpdesk which offers an add-in tool that scans your network to collect data on the equipment that is on our network. I have a simple report that can be exported with model and serial numbers, effective date, predicted cost of equipment when it went in to the environment, and the user assigned to the equipment. I then easily import the data into Planning Maestro.To calculate the depreciation in sync with the capital budget, your IT Department simply needs to make sure the cost of the equipment and effective dates are accurate in Spiceworks for the report to import properly into Planning Maestro.

Understanding, your IT Budget is an extremely important aspect of operating a business today. From the recent State of IT report, published by Spiceworks, Inc, more than 31% of the 2018 Budget will be allocated to hardware and peripherals, and 21% on hosted/cloud services. This is an increase of 52% from 2017. The reason: a need for new equipment, whether its old and outdated or damaged from general usage. The need to manage the assets you are responsible for and doing it the best way needs to be added as a task in 2018. This data will provide the proper impact to your company’s budget and especially provide validation for additional requests for equipment as the need changes not only for 2018 but ongoing into the future.Within the capital budget, what IT department wants to lose funding for that fiscal year? Without the proper documentation in place there may be a need to have equipment rendered obsolete. Without proper documentation you may be losing an opportunity because you may not know certain equipment can be properly swapped out in a 3-year timespan and not a 5-year.If your company currently use’s Planning Maestro or you have used it at another company you may already know the benefits of the Asset module.

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