Years ago, the only option finance departments had to manage their capital expenditures was a ledger book and spreadsheets. However, in this digital age, the CapEx process has moved past simple tallies in a book. Today, CapEx software has become a necessity for every business that intends to streamline capital expenditure management.
But, how effective are they? How much of the process do they really automate?
What is CapEx software?
CapEx software allows businesses to plan, budget, and execute CapEx projects. It also ensures that all CapEx requests pass through review by a series of stakeholders in sequential order until their completion. Additionally, CapEx software stores all CapEx-related information in a single interface, reducing administrative errors and improving audit-friendliness.
Challenges of a manual CapEx approval process
Even today, some businesses rely on manual tools like spreadsheets, paperwork, emails to manage their capital expenditures. In a manual CapEx process, the probability of requests getting lost is very high.
Out-of-date financial management systems make the CapEx process expensive and rigid. As a result, organizations spend more time figuring out and implementing workarounds to keep the CapEx management process smooth.
A manual CapEx management process:
- Is slow, costly, and laborious
- Offers inaccurate projections
- Demands too much manual effort
- Hinders the visibility of cash flow
- Is filled with approval bottlenecks
Do organizations need software to manage capital expenses?
Irrespective of the industry an organization specializes in, every business will have its own strategy and way of managing capital expenses. Regardless of the strategy being used, CapEx software improves the management of capital expenditures within an organization.
A good CapEx software will enhance the performance of a business by connecting its data, people, and financial plans. Their cloud-friendly nature enables organizations to automate and structure manual CapEx approval processes to create timely reliable budgets through proper planning and forecasting.
With a connected CapEx software solution, businesses can put time back on the clock—offering stakeholders reliable and accurate financial insights. These solutions help finance teams to align their business objectives with a financial plan that is linked with market trends and operational tactics, accelerating financial transformation and business value.
When evaluating and implementing capital expenditure software, the right decision can yield your business an array of benefits. Getting it wrong can do serious harm to a business. Choosing the right software is not that hard if you know what you are looking for.
You need to identify how frequently your organization would purchase capital assets, the complexities of the assets you purchase, your review and decision-making process, and how you get the numbers to back your CapEx requests.
Difference between CapEx and OpEx software
CapEx software streamlines the process of acquiring, managing, and projecting capital expenditures and long term assets (property, infrastructure, equipment). OpEx software, on the other hand, manages a completely different set of financial expenses called operational expenses.
Operating expenses are incurred on an ongoing basis and are commonly referred to as the cost of doing business. Good and flexible financial management software should allow organizations to manage both CapEx and OpEx in a single interface without any hiccups.
In today’s competitive environment, in order to stay ahead of the pack, organizations need to constantly grow and stay at the top. Capital expenditures play an important role in this process. So, the automation of capital expenditure management processes using CapEx software has become more of a necessity than a mere competitive edge.
CapEx automation tools like Kissflow Finance & Ops Cloud can help you with that. Take Kissflow Finance & Ops Cloud or a spin and see how easy life can be with a tailor-made CapEx software.