For the savvy business owner, capital expansion is a natural course of action to take, especially if the business is doing well and the possibilities of doing better are imminent. Of course, this expansion – asset acquisition or in some cases, upgrade of existing assets such as buildings, equipment or other physical properties to increase your operational scope – requires further investments, or in financial lingo, capital expenditures (CapEx).
For a business comprised of multiple decision-makers, capital expenditure approval goes through a unique process, a sequence of steps or workflow. And because these steps are normally the same for most, if not all, CapEx approval instances, automating the workflow is a big step towards better time and resource management, data accuracy and overall workflow efficiency.
The capital expenditure approval process, in a nutshell
In almost all cases, the CapEx approval process involves the following steps:
- Request submission
A request is forwarded to the approval panel, and the supporting documents are gathered and presented.
- Verification and clarification
If the documents are not sufficient to justify the CapEx amount or the reason behind the proposed expansion, additional documentation may be requested.
- Rejection or approval
If the request is approved, it becomes a project and the baton is passed on to the department/s that will carry it out. The reasons behind the approval or non-approval are important – to determine best practices that can be implemented in future capital expenditure approval sequences.
Streamlining the capital expenditure approval process
If, for example, your approval process includes entities aside from the Chief Financial Officer and the top guns of the Finance department, imagine the number of files and folders to send out to every member of the approving committee. And that’s not even mentioning the communication lines for verification, discussions and suggestions.
With the right workflow management software, automating the approval process means keeping all the documents and discussion threads in a single place, and available to the parties involved either through the cloud or on-premise. If the workflow is in the cloud, members do not have to be in the same physical location to participate.
To ensure that everything moves along just as planned, aside from e-mail push notifications, a task is automatically created for anyone assigned to perform the next step in the workflow.
As well, the right work management software assigns role-based access protocols that make it impossible for anyone who is not part of the approving panel to gain access to shared data, even if he/she is from the same department.
Automating your CapEx approval workflow is perhaps the best way to manage the process. By doing so, your team is better able to focus on what really matters (intelligent usage of expansion capital, that is) in a simplified, convenient and timely manner. If you believe a CapEx approval software is something you might want to try, you may sign up for a free 30-day trial with Comindware Tracker.
Image credit: renjith krishnan | FreeDigitalPhotos.net
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