A capital expenditure budget is a document used for stating the planned amounts and time for the purchase of fixed assets by a company. Usually, businesses make provisions in the annual budget for the capitalization of expenditures.
Expenditures to be capitalized are decided by mutual consensus of all the business stakeholders. Usually, it involves expenditures requires for the expansion of existing assets, the purchase of new assets, and the construction of new facilities for expansion plans.
Review the income and expense spreadsheets before downloading this one.
Key Features of Capital Expenditure Template
Capital expenditures budget isn’t finalized in one go. It’s an iterative process involves the evaluation of expenditures by using the rate of return, payback period, and other feasibility tools.
The acquisition of the fixed assets depends on the projections made in the budget. However, it can be later adjusted as per the need to fulfill the expansion capabilities and cash flows requirement.
- Create Annually budgeting Sheet of Excel
- Manage ongoing expense and revenue daily basis
In expansion plans, the span of the capital expenditure budget is always longer than one year. As the renovation work or new construction of the facility for the installation of fixed assets takes much time.
Capital expenditures budgeting is important for any company to operate and expand for enhancing financial stability. These expenses are made for getting greater financial benefits.
- The usefulness of a capitalized expense reveals over several years by the creation of profits. These are different from the operational costs of the existing assets of a company.
- Let’s just understand it by an example. The cost of fueling and maintenance of any vehicle fall under operational expense. While the cost of purchasing a vehicle itself is a capital expenditure.
- Keeping in view the importance of capital expenditure budgeting. This Capital Expenditure Budget Template Xls is designed well to fulfill all the requirements of budgeting for purchase, renovation, expansion and other plans of a company.
It is really easy to use and can adapt to any business category. Also, it’s integrated with the capital expenditure budgeting request form to enhance the usefulness.
How to use Capital Expenditure Budget Template?
- The list of items to be capitalized is different for each company.
- It is important to understand the use of the capital expenditure budget template. Just like the Fund flow statement.
- A brief summary of the capital expense and management team is jotted down at the top of the template followed by a table for more details.
- In the details section, the first column is for writing down the type of expenditure, followed by the description column for each expenditure type.
- Moreover, it is recommended to add an estimated budget, capitalization period, depreciation rate, operating accounts.
- Reserve escrow columns as well to improve the usefulness of the template.
- As the capital expenditure budget template is developed using Excel spreadsheets.
- Therefore, its application and practicality of usefulness improve manifolds.
In conclusion, the capital expenditure budget template Xls is very useful in improving the financial stability of the business. It expands the business and grows the profitability.