Everything You Need To Know About Automating Capital Expense (CapEx) Projects & Spend Management in 2020
Acquiring new assets and maintaining the ones you currently have can add serious value proposition to your organization. Like any investment, acquiring capital assets requires a careful assessment and acquisition process. You have to ensure you’re budgeting your projects adequately while also being aware of those places where spend can get out of control. In addition, most assets depreciate over time so you’ll need to cautiously consider your investments in order for you to see the maximum benefit.
When taking the initial step and executing any high budget project, like remodeling a facility or purchasing significant equipment, you need to be sure that the budget is not exceeded. Ideally, you’d even go a bit under budget. But you may not have the resources to adequately track spend at all levels of your organization. So, how can you best manage these budgets when working on projects in multiple departments, states, or even countries?
The answer to this question used to be extremely complicated. Now with the help of business process automation software, managing even large-scale capital expense projects is much more simple. With the assistance of capital expense (or “CapEx”) management software, you’ll be able to simplify collaboration and communication while managing spend more effectively. Keep reading to discover how this works.
The Essential Value of Clear Policies
It is of great importance that you have clear, consistent policies and procedures in place to govern capital project management. Make sure you thoroughly document your company’s approved process and keep it updated with any exceptions or changes in policy. This is something you’ll need to do in addition to implementing project management software. Your policies are what you’ll use to customize the software you’re using and to govern capital project spend management.
The software we’re talking about in today’s article is not a replacement for sound financial planning or management practices. You will still need to have policies in place regarding how your company plans and budgets for capital projects. This planning process should take into account long-term company goals, all the resources a project will require, and realistic deadlines. And that’s on top of considering the financial budget.
In addition to having company policies in place regarding capital expenditures, you need to clearly communicate those policies to your employees. Thorough employee training in best practices, industry-specific knowledge, and the established procedures for requisitioning funds can greatly improve budget adherence and effectively keep your spending caps in place. The time spent on training will go a long way towards managing your spend. It’ll also help keep operations and acquisitions running smoothly.
Going Beyond The Human Factor
Training and documentation can go a long way in keeping your CapEx projects well-managed and under budget. Even so, the amount of information involved in a single project can still be overwhelming. It’s difficult for human employees to keep track of everything, especially if you’re still using a paper-based system and/or spreadsheets. Trying to manage significant data collection can also be very cumbersome, particularly if you’re tracking expenditures manually.
Business process automation is the solution many businesses now turn to There are a few options available in the burgeoning software market of capital expenditure, project, and asset management tools. This sort of software can be incredibly helpful in transforming your project. It’s not meant to replace human employees, but rather to make their jobs easier. When they don’t have to worry about repetitive, time-consuming tasks that a computer can handle more easily your employees have more time to work on value-added tasks for your company.
Fortunately, capital expense management software doesn’t have to be a capital expenditure in itself. Software has become increasingly accessible and affordable, with a variety of wide-ranging products. It’s easy to get lost in all of the options, so let’s take a look at what functionality will be most useful for you.
Collaborate and Communicate
Clarity of communication is a major concern in capital project management, especially when a team is collaborating on a major effort. Good software makes communicating and coordinating much easier by giving everyone involved in capital projects access to the same software platform for managing each project. No matter how many people are involved or where they’re located, they can all work together using a software system that updates in real-time. This ensures everyone involved can see exactly what’s going on with each project at any given moment.
Implementing capital expense management software also helps with communicating your policies. With a program like NextProcess’ Capital Management Software, you’ll be able to customize the system to match your company’s policies and practices. That makes it possible for you to automatically enforce your policies regarding capital expenditures.
Consolidate and Standardize
It’s very hard to manage spend if you aren’t tracking all your capital expenditures using one system. Multiple spreadsheets or different departments keeping information in different programs makes getting an accurate view of where the money is going difficult or impossible. But if you use capital project management software, it tracks everything automatically and all in the same place.
Another useful feature of capital project management is that by managing all your projects from a central system, it’s easier to standardize how your company manages CapEx spend. If you have different people setting up spreadsheets in different ways or using different programs to track capital expenditures, it’s hard to keep things consistent. You’ll have a much easier time tracking funds when you’re managing all the information with the same software program.
Improve Visibility and Searching
It’s vital that you know where your company’s money is right now. Capital project management software lets you check on the budget for each project as it updates in real-time. You’ll have complete visibility into the state of each project and whether or not it’s on-budget. Plus, you’ll be able to search through past records for any project to get a better idea of how your company’s money is being used.
Good software will also record a detailed audit trail from the inception of the project to its completion and far beyond. This feature is essential for managing CapEx projects as they’re happening and for making use of the data after they’re finished. It also makes audits easier, as well as provides useful data for forecasting how similar projects might go in the future.
Make It Easy For Employees
As already mentioned, the goal of using capital project management software is to make employees’ jobs easier. In order to do that, though, you’ll need to make sure you select a software program that’s easy to use. NextProcess, for example, specially designs our software to make it easy for employees to learn how to use the program. Our software is also easy for you to customize. You’ll be able to tailor the system to your company’s specific policies, procedures, and needs.
Choosing NextProcess also makes things easy for your IT department. Web-based platforms like us update their software routinely with no effort required from you. We’ll upgrade your system automatically without requiring software patches or expensive upgrade packages. Not only that, but a web-based platform like NextProcess is very easy to set up and it integrates seamlessly with your existing ERPs.
Plan For the Future
When selecting a program to assist with your capital project management, you also want to consider how the program will be used. Software becomes obsolete amazingly quickly and this phenomenon will only increase as technology continues to advance. If you want to stay up-to-date with the latest trends for less money, then choosing web-based capital project management software is the way to go.
NextProcess also offers a suite of related software programs that you can use to expand on your new capital project management system. If you’re also planning to automate (or to update existing automation) in accounts payable, purchasing, expense reporting, and more you’ll want to check out our suite of software solutions. Getting all your automation software from the same supplier makes it easier for employees to learn the system, eliminates the risk of software conflicts, and streamlines the customer service process.
Ultimately, a web-based software platform is ideal for accessibility, visibility, and spend control. Combined with effective employee training, a good software platform has the key to managing capital expenditures. To learn more about how NextProcess’ Capital Management Software can speed up, streamline, and ease collaboration for all your capital projects just click here to get in touch with us. You can even schedule a free demo and see how the software works before you commit to anything.