The Problems with Manual CapEx Processes
To start, most organizations (even large multi-billion-dollar business) are still relying largely on a paper-based system to manage their CapEx which also requires input from multiple stakeholders. This unfortunately leads to lost time, lost CapEx requests, delays or disruption to CapEx projects and lack of enough data for review and reporting.
The Issues that rise as a result are:
- Inaccurate budgets and forecasts
- Project delays or cancelations
- Unauthorized spending
- Insufficient reports
- High Error %
- Inefficiency throughout multiple department
- Loss of profit
- Low visibility
- Approval bottlenecks
The Solution
The solution is simple, in order to reduce costs, improve efficiency and gain a competitive advantage, businesses need a software to streamline all aspects of your CapEx lifecycle from the start of the budgets and forecasting to the completion of a project. Businesses need to automate their CapEx lifecycle in a system that will bridge the gap between information and employees increasing visibility, transparency, standardization in a user-friendly environment.
In order to implement a CapEx Software that will cover 360 degrees of Capital Expenditure control, the software must handle:
- Multi-year CapEx planning and budgeting
- Budget imports and exports to Excel
- Planned and unplanned carryover
- Multi-currency
- Forecasting with forecasting scenarios
- CapEx forms
- Delegation of Authority
- Supplemental Requests
- Automatic Approval Request
- Email Approvals
- Mobility
- Auditing and tracking
- Reporting
- A great administration module
What is CapEx Software?
CapEx Software is a solution that allows businesses to automate, streamline, standardize and track all aspects of the CapEx lifecycle from Forecasting and budgeting to CapEx request and approvals to Project execution and post investment review, a though CapEx Software should cover it all.
The benefits of a CapEx software
Getting rid of the spreadsheets and email CapEx requests to a fully integrated and intuitive CapEx Software would increase efficiency in resources and CapEx execution while giving the business better visibility due to real-time financial metrics allowing for the best portfolio investment decisions. And better data to make better decisions would lead to business success and growth.
Some key improvements to an organizations CapEx would include:
- Increased transparency of the overall CapEx
- Better project planning and estimating
- Faster CapEx approvals
- Accountability across sites and regions
- Increased productivity
- Detailed reports
- Accurate up to date data (stop unauthorized spending)
Conclusion
Capital expenditures are the largest and riskiest accounts in the financial statement. Therefore, an understanding of the importance of CapEx processes and procedures are so critical and can significantly affect the value of a company.
With competition and pressure on margins, companies need to think ahead and automate their CapEx in order to grow and stay competitive, because when your CapEx is well managed your profit margins increase, your projects stay on budget and your business runs smoothly allowing for your focus to be on the business opportunities looking ahead.
See how Caprivi Solutions Covers 360 Degrees of CapEx Control
