When it comes to making decisions about capital expenditures, you want to have as much financial information as you can.

These sorts of expenses – for property, industrial equipment, office equipment, and the like – can represent a large percentage of your company’s budget during a particular cycle, and influence your finances for a long time to come. Because of this, it’s important that you be able to plan for these expenses using the most accurate budgeting methods possible.

Create a separate budget

While each company handles capital expenditures somewhat differently, a good first step for most enterprises is to create a separate budget solely for these large investments. By breaking these costs out from your regular operational costs, you’ll do the following:

• Allow for more accurate calculation of taxes, or determination of potential tax issues
• Allow for easier consolidation of expenses, if different departments are submitting requests for items falling in the capital expenditures category
• Allow for better and more transparent management of debt incurred by a capital expenditure

With True Sky, it’s easy to break out a separate budget for these costs, as True Sky allows users to create new data models and templates on demand. Whether you’re planning for your first-ever real estate purchase or upgrading your entire office’s computer systems, you’ll be able to input the data you need exactly the way you need to see it.

Analyze risk and reward

If you’re going to make an informed decision about a major expense, like the purchase of new factory equipment for example, you have to be able to get a good picture of the financial risk versus the potential reward.

True Sky is built for this kind of analysis. We’ve made reporting and monitoring a priority, so that you and your team can pull the data you need when you need it. From balance sheets to cash flow statements to quarterly reports, you’ll find all the information you could want at your fingertips.

Because True Sky can handle any budgeting model you choose, as well as a rolling forecasting model, you’re able to place any potential capital expenditures you’re planning in context. All you have to do is create “what if” scenarios for your various expense options.

Using this feature, you can see what would happen to your finances if you paid for the aforementioned equipment outright, versus breaking the purchase into smaller increments or borrowing the money.

This way, you can accurately forecast the potential risks to the rest of your company’s budget.

Grow your business while maintaining agility

Capital expenditures are a necessary part of any business’s growth. When you’re tying up large amounts of money, however, it can be hard to stay truly agile. You want to grow, while still being able to react to changing market conditions as quickly as possible.

Since the data you enter into True Sky is available in real time, you’re always able to see where your business stands right now. The system also allows for different versions of your budget, plus easy access to historical data.

All together, this gives you a clearer picture of your company’s past, present, and future, making it possible to make sounder financial decisions.

Users can also include comments or attachments with their entries, which can be especially helpful for large expenses.

Say you’re opening a new location a few cities away, and you’re purchasing a building to house the new staff. In addition to the purchase price, you could attach a sheet detailing property tax trends for the area.

If the building happens to be in need of repairs, you could attach images of what needs to be fixed, or comments explaining what must be handled now and what can be put off until next year. Whatever users decide to include, the results are the same: a clearer understanding of where your money is going and why it’s going there.

Could your business benefit from True Sky’s capabilities? Contact us to learn more.