Automating Your CapEx Approval Process: The Why, and the How
October 9th, 2018 • workflow
Whether you’re an enterprise CFO or ‘the finance guy’ at a startup, you probably don’t joke about capital expenditure. An integral part of cash flow in any organization, it’s crucial that the CapEx approval process runs smoothly and without error.
If you know your finance, skip right past the next section.
What Is a CapEx Approval?
By definition, CapEx or Capital Expenditures are the funds used to acquire or upgrade a company’s fixed assets, such as expenditures towards property, plant, or equipment (PP&E).
This could be something as simple as fixing a broken chair in the accounts room, or a complete and comprehensive IT infrastructure upgrade.
Capex Approvals are actually a series of multiple approvals. Before funds get released, each CapEx approval request must pass through a series of stakeholders in various departments. Whether it’s asset acquisition, renovation, or a lease, these stakeholders will all have to give their go-ahead before so much as one cent gets disbursed from the company’s funds.
Why Your CapEx Approval Process Needs Automation
The CapEx approval process is crucial to the smooth running and growth of an organization. That’s why it’s a big problem when requests take time, or get lost under a mound of paperwork. Without automation, CapEx approval workflows can be a veritable nightmare.
Traditional CapEx Processes Are Slow
When you take the dated manual paper-based approach, your CapEx approval workflow tends to be ungainly, bloated, and slow. When an organization is trying its best to get to market as early as possible, a dated approval process can slow things down.
Especially with mid- and large-sized companies, manual CapEx approvals tend to be lumberingly slow, heavy, and inefficient as well.
One driving reason for automation being embraced around the world, in practically every industry vertical, is manual error and lapses.
Manual errors drive down efficiency and productivity in the CapEx approval process. People can make mistakes with the routing of approvals and in calculations. This affects productivity directly. Especially as more and more people need to sign off on company expenditures, the room for error also increases.
There Are No Standardized Guidelines
Technically, organizations do have a certain way by which the CapEx process is executed. Yours likely has some guidelines and policies in place that state that approvals can be made provided certain documentation and data is available, and some justification criteria is met.
But for the CapEx approval workflow to really work for you, these guidelines need to be an integral part of the process itself.
You can state strict guidelines in company policy, but they can be a little tricky to enforce. Team members who are processing multiple CapEx approvals each day can make errors, which leads to misinformation, missed timelines, and further time wasted resolving these issues.
How CapEx Approvals Run in KiSSFLOW
KiSSFLOW offers its 10,000+ users a number of workplace-specific apps, and one of the most popular choices is its expense approval template.
Using KiSSFLOW, you have instant access to expense details like the date an expense was made, the type of expense, and why funds were necessary. You won’t lose track of receipts either, as those can be attached right on KiSSFLOW’s easy-to-use interface. Instant access paves the way for crucial analysis and insights. This app can be edited as well; you can control access, the stakeholders and their order, and processing rules.
You can gain an insightful look into department-wise expenses, the status of each request, whose approval is pending, and date-wise statistics about approvals.
CapEx, on the Move
Given the close competition, it is crucial that organizations constantly grow to stay at the top, CapEx approval processes should definitely be automated. This is more necessity than a luxury, as the examples cited clearly show.