Now is the time of year when EDI managers start looking at what’s left in the current budget and what projects can be set aside for next year. With spending being on a hiatus in the early uncertain days of 2021, many companies have unspent money in their IT budget. Perhaps you have a big project scheduled in early 2022 but not enough capital in the 2021 budget to cover it. If you play it smart, you can sometimes include both fiscal years for these bigger projects and come out looking like a rock star to your CFO. Take company Random Client from Anywhere, USA who wants to implement a mid-5 figure Enterprise level integration platform that includes scale-out processing and failover. They don’t want the entire cost to come from neither 2021 nor 2022. Simple – I advised him to buy the software licenses now, which can be installed at a later date, and we can bill them for Professional Services whenever they are ready in 2022. This is the simplest way to split your project between two different fiscal years and is a scenario we see often.
But it’s not always about splitting up a large project. Sometimes it’s simply about prioritizing which projects need be completed now versus which ones can wait until Q1. Let’s look at another client who wants to start trading with Amazon but Amazon has not given them an order commitment yet. But another, smaller customer also wants to start trading EDI and is ready to send a healthy purchase order now. The priority is obviously the customer that is ready to send a PO now and those implementation costs will need to come from this year’s budget. And Amazon can be prioritized for 2022, especially when you consider how long Amazon implementation and testing can take.
Another option for creative budgeting is paying up front for 2022 services before the end of fiscal year 2021. This can be accomplished with a fixed fee Managed Services solution or even an annual VAN mailbox. Many of our solutions can billed on an annual basis – it never hurts to ask. We even have clients who prefer to be billed quarterly or every six months. Be careful though in terms of accounting practices. According to Investopedia, in GAAP (Generally Accepted Accounting Principles), Prepaid Expenses should not be counted in the books until the product or service is delivered so be sure to do your homework on what is considered a Prepaid Expense and what is not.
Bottom line - don’t forget that working with a smaller company (ahem, like GraceBlood) means there are more options for billing flexibility. This is in addition to our white glove approach to onboarding, exceptional customer service, and best-of-breed solutions. There is a reason why our attrition rate is so low. What projects do YOU still have targeted for 2021? Let us help.