5 Helpful Hints to Improve Your CapEx Planning Using EPM Software

5 Helpful Hints to Improve Your CapEx Planning Using EPM Software

Capital depreciation expenses are among the most favorable deductions come tax time.

Capital investments are also a sure sign that your company is growing and prospering, which in this iffy global economic situation is a good thing. What are the best tips and tricks when it comes to CAPEX planning?

1. Ditch the Spreadsheets

EPM software

Spreadsheets take an enormous amount of time and labor, and are usually prone to lots of human errors. EPM software is quick and easy, eliminating days or weeks out of the planning and budgeting processes.

If you’re still using Excel spreadsheets, your CAPEX planning is likely full of errors you’re not aware of. You are, however, aware of the excruciating weeks it takes to put together your annual budget and operating plans. EPM software allows you to drill deeply into your data, create far superior reports, and best of all, it eliminates the costly mistakes that Excel spreadsheets have unfortunately, become notorious for. Planful Cloud EPM Suite allows you to transport the data directly from Excel, and it works like Excel, so there is virtually no learning curve for Finance users.

2. Make Sure OPEX Items Don’t Get Misplaced in the CAPEX Budget

It can be easier than you think to leave OPEX items in the CAPEX budget. For example, if you originally planned to purchase a new facility, but later decided to lease instead, that expense sometimes doesn’t make its way out of the CAPEX budget into the OPEX budget. On the other hand, many capital projects have OPEX impacts such as staffing and maintenance of a new facility.  Before you wrap up the planning process, make sure you’ve got all of your costs in the right bucket.

3. Learn the Smart Reporting Practices EPM Software is Capable of

When you first switch from Excel spreadsheets to EPM software, you’ll have to learn about all of the new drilling and reporting capabilities. For example, you can run different scenarios to see what would happen if you choose this capital investment versus that one. It will also allow you to engage in long-term modeling to see how different capital investment options play out over time.

4. Be Sure the Right Data is Available

Often, projections based on educated guesses get entered into the CAPEX budget, but no one remembers to go back and change that when the actual numbers are in. Be sure that all of the data relative to a capital investment is entered in.

5. Actively Control Spending

EPM software

Set up a plan to assure that someone goes back periodically to see that actual capital expenditures are on par with the plans and make adjustments when and where necessary.

Setting a budget for capital expenditures is only half the game. You have to actively monitor those expenses over time so that you stick within the projected numbers. If one investment goes over budget, another needs to be canceled or renegotiated in order to make the projections work right. EPM software makes it far easier to make these adjustments, play around and see what different scenarios look like, and stick within the confines of the CAPEX plans you’ve developed.

Are you still stuck with labor-intensive, cumbersome Excel spreadsheets? Take advantage of our whitepaper: No More Spreadsheets: Top 5 Reasons to STOP using Excel for Planning and Performance Management to see how Planful can free you from spreadsheet hassles forever.

Download the Whitepaper

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