My first job out of school was analyzing and shepherding ‘Authorization For Expenditure’ packages (Capital Equipment Requests) from executive to executive at Daimler. Each executive depending on which part of the company they were responsible for, looked at these requests differently. Each required financial justifications that they were comfortable with and each had their own pet peeves. Organization politics also played a prominent role when individuals or groups had a personal interest in certain projects. This would sometimes increase the number of obstacles, the amount of information required, and how long it might sit on some ones desk. This was long before task management software was fashionable so most of my interactions were face to face.
What I learned from these personal interactions was the need to leave nothing to chance when it came to the information I prepared to support of the funding request. An incomplete submission, or not including information a particular executive was looking for, meant a long walk back to the financial department bullpen for a redo.
I took these lessons with me throughout my career to where I am today, as an owner of a capital equipment manufacturer. The goal of these posts are to help you develop your own capital spending request whether you own a twenty person machine shop or you are where I was early in my career at a Fortune 500 company. Future topics will include: capital evaluation techniques, investment plan development, financial modeling, economic analysis guidelines, new versus used equipment, finance methods, and tax strategies. As I move through these topics I will post user friendly templates on our website and welcome questions that might develop.