The current report from the U.S. Census Bureau (CB) shows that there is almost a 7 percent growth rate of Capital Expenditures for Companies with Employees by Industry Sector from 2016-2017, and it also includes the 6.9 percent growth rate of Capital Expenditures for Structures and Equipment from the same fiscal years. Amidst all these data (especially for new companies) the question of how we can create a capital expenditure budget, comes to mind. Although we can leave the calculating to the accountants and the budgeting committee, a format would greatly help expedite the process.
Steps in Making a Capital Expenditure Budget
Investment is always risky, and in a sense, Capital Budgeting is also fraught with danger but with a more positive response when it comes to rewards. It is that leeway that could expand the company’s paradigm towards a more expansive platform, considering it delivers the desired outcome.
Step 1: Evaluate Potential
Potential is always a given towards every company, institute, or organization. Although the current trend might not display a worthwhile possibility of the entity’s actualized realization, it’s always beneficial for a party to try and initiate an evaluation of its potentials. The possibility is limitless, but be sure, not to mindlessly venture without a proper deliberation of its financial and logistical considerations.
Step 2: Estimate Cost
In the context of the company’s finances, an estimation of the project or expansion’s cost should be heeded. This process can include some studies, both internally and externally. A team of IT professionals might be or asked for several pricing out in regards to some technological upgrade, and the logistics team can help in the evaluation as part of their responsibilities.
Step 3: Equate Value
A valuation of a budget’s nature should be recognized, especially when it comes to maintaining the cash flow, and whether or not the benefits are immediate or gradual. It should also be noted well if the said plan or venture has a sense of value per the company’s position.
Step 4: Establish Risk
Risk is a byproduct of investment. Establishing risk in making a Capital Expenditure Budget is of extreme importance. Not only does it develop a healthy outlook in the project’s completion or failure, but it also allows rationality to take over. Building up its on its immediate response, hence, expanding the company as a whole.
Step 5: Execute the Plan
If the company has deemed the project plausible, a plan of its execution should be created. This should include its considerations, the estimated cash flow, its milestones, and even a determined date of its completion, making it a SMART goal as much as possible.
8+ Capital Expenditure Budget Template
A collection of templates is included below to expedite the process of visionary leaders who want to initiate.
1. Capital Expenditure Budget Template
This Capital Expenditure Budget Template is a ready-made template for those who are eager to initiate their capital expenditure budgeting in the shortest possible time. It is available in diverse formats allowing the visionary the flexibility he/she badly needs. Download this template to start fulfilling that vision!
2. Expenditure Budget Template
If a specific Capital Expenditure Budget Template is not of value as it is too particular, maybe this Expenditure Budget Template would be appreciated as it not only includes the capital budgeting but it also covers, the operational budgeting. This format comprises the overall budget of the company making budgeting a breeze.
3. Expenses Tracking Template
The Expenses Tracking Template is a simple format reporting the ins and outs of a company’s cash flow, and it is available in Google Docs, Google Sheets, Excel, etc. It’s user-friendly and simply perfect for those young enterprises with great potential.
4. Budget Proposal Template
The stakeholders are usually the devils of ambitious projects. A lot of times, people dread the sight of them, but this Budget Proposal Template (shown above) is just the answer. It was designed to be compelling as possible for the investors so that those visionary programs might see the daylight.
5. Venture Investment Proposal Template
Apart from the capital budgeting that should be included more or less within the annual budget, a venture when it comes to the future of the company could sometimes arise, which is technically unbounded by the commissioned financial designation. In such an instance, this Venture Investment Proposal Template should suffice the need. A high-quality template made for the first impressions. This format is designed professionally and written formally, catering to the needs of the business-minded.
6. One Page Business Proposal Template
If simplicity is desired, this One Page Business Proposal Template is a guaranteed addition on the visionary’s repertoire. It’s concise and straightforward, giving the reader more time considering its possibility. Download this for a swifter and convenient proposal writing process
7. Free Blank Budget Timeline Template
For the visual types, this should be the perfect illustrator. This Free Blank Budget Timeline Template allows the planner to see the project beyond the point of its annual milestones. It is a worthwhile timetable that sets the mood past the confinements of seasons or years.
8. THECB Capital Expenditure Plans
This is a beautiful example of what a capital expenditure budget should look like, the THECB Capital Expenditure Plans for the fiscal years 2012-2016 shows how a plan should look like, complete with all the details. This sample presents the Texas Higher Education Coordinating Board (THECB)’s programs within the years and how it happened with all the justifications needed.
9. Detailed Capital Budget Request Form
This sample report form is from the Loyola University Chicago. It’s called the Detailed Capital Budget Request Form. As the name suggests, this form is specific. This is a creative approach of the University towards its Capital Budgeting, allowing people the flexibility of handing out their proposals without the technical restrictions of budget-setting.