As the world changes quicker than ever, your business is forced to consider capital expenditure requests (CapEx) on a more frequent basis. Now it is not a question of whether or not to invest into new equipment, technology or other competitive advantages, but of which asset to invest in and when. Nevertheless, COVID-19 pandemic and its dramatic impact on business forces businesses to crunch СapEx in order to stay afloat. Finally, it becomes even more important to make sure that each CapEx request goes through a rigorous evaluation and approval process quickly in order to look forward to new growth opportunities, while safeguarding business from the financial drain.
CapEx approval requests pass through a series of stakeholders in numerous departments. This process is frequently paper-based, managed manually and tends to be heavy, bloated and slow. Even more, manual error and lapses, situations when CapEx requests get lost under a mound of paperwork and numerous other issues frequently make a CapEx approval workflow a veritable nightmare. The situation is not much better when a paper-based CapEx approval form template is replaced with the CapEx approval template in Excel. Eventually, when the team makes its best effort to get to market or gain competitive advantage as early as possible, an out-of-date CapEx approval process can tangibly slow things down and bring negative impact on your bottom line. In order to avoid the risks mentioned above, it is likely to make sure that your CapEx approval workflow is accurate, reliable and effective.
It will be useful to start from establishing clear long-term objectives for your capital expenditure initiatives. Doing so, you make it easier for stakeholders to decide if a specific CapEx request is worthy of approval — if a CapEx project doesn’t further business to the long-term goals, it doesn’t get funding. Then create CapEx Approval Guideline or Policy and state request justification criteria, necessary documentation, engaged stakeholders and area of responsibility for every of them, business rules that change a number of stakeholders and CapEx approval process flow according to CapEx type, requested amount, requestor location or whatever request attribute.
Once you’ve established your long-term goals and CapEx approval guidelines, be sure to communicate them to all managers. It might be tricky to enforce these guidelines and CapEx workflow automation helps a lot with making the guidelines an integral part of the live process and ensure that they really work for your business. The automated CapEx approval process usually starts when a department leader or regional head identifies the need for a capital asset in the capital request form. The form usually includes asset type, expected benefits and costs, estimated ROI, useful life of the asset, documents needed according to your CapEx Approval Policy, and more. Once the CapEx request is submitted, workflow software automatically defines CapEx type and routes it to persons authorized to approve it. Before sending to the leadership teams or the finance heads, the request is usually extended with additional information, such as residual CapEx budget, a number of pending requests, and other data that might help with ensuring that capital expenses will impact on the growth of the company and are financially feasible. Besides, every involved individual gets notification about a new CapEx approval process may include quicker CapEx approval cycle, reduced human error, CapEx approval workflow transparency, on-demand reports, and safeguarded investments into business growth.
Comindware offers workflow automation software with the ready-to-use template of CapEx approval process and customizable CapEx request form. You will not have to adjust your operations to this template — use it for a quick start and correct both workflow and form according to your CapEx Approval Policy and actual business needs with drag’n’drop simplicity. You can also import your CapEx report template into the system and make sure that it automatically generates the report with proper formatting. It is easy to convert your paper-based CapEx budget template into a web-based one and enjoy checking it any time from anywhere. Even more, you can easily integrate your paperless CapEx approval workflow with your procurement system, ERP or accounting system and ensure smooth data exchange.
Electronic CapEx approval process template
Fully adjustable CapEx request form template