The Capital Expenditure (“CAPEX”) Request is an important document as it is
used to make a decision to spend money. It is also used to provide information
as to the expected timing and amount of cash inflows and out-flows.
Although accounting personnel are usually responsible for coordinating and
compiling much of the information in the CAPEX Request, other people such as
IT, marketing, technical, production or engineering staff, will also be involved
in the preparation.
Project champions have the ultimate responsible for the preparation of the
appropriation request.
Decisions on major CAPEX Requests will be taken at senior management levels
or by Directors of the company as large-scale capital projects have far-reaching
implications on the future profitability of the company. The decision-makers
involved in the final decision will not have a detailed knowledge of all aspects
of a project and they must, therefore, rely on the facts, estimates and appraisal
contained in the CAPEX Request and Business Case document.
CAPEX Request should be prepared for:
- All capital expenditure projects over a minimum amount,
- Major expense items such as non-routine repairs,
- Additional funding when original estimates have been exceeded,
- Retirement requests for assets no longer required.
The CAPEX Request should refer to the Business Case document. It should also
show linkages to the strategy, goals and objectives of the organisation and
to other projects that might impact on the project.
