Appropriation Request

An appropriation request is a formal application made to a decision-making body to allocate funds. These requests specify the intended use of the funds and the necessary amount to ensure the project’s success. The capital request process plays a vital role in securing the required funds for growth or innovation in the business world.

What Is the Capital Request Process?

Securing funds is closely tied to overall money management. Consequently, managers need to establish and follow a process to ensure each proposal meets specific criteria. Determine what those criteria are ahead of time and then follow these steps.

1. Project Proposal

Begin with the development of a detailed but concise proposal. This document should outline the need for funding and how managers will use that funding to create value for the business. Once the proposal is complete, managers submit it for review and approval.

2. Capital Appropriation Request Form

If approved, the next step is to fill out a capital appropriation request form. This form should include all pertinent details about the project, including its purpose, expected costs, and potential benefits.

3. Submission for Final Approval

Once completed, managers submit this form to the decision-making body for final review and approval. Sometimes, the decision makers might call on the project manager to provide more information or make a more detailed presentation.

4. Allocation

If approved, the governing body allocates funds and the project can proceed. However, if investors deny the request, the business will either need to appeal or explore other funding options.

What Happens After the Funding of a Capital Appropriation Request?

After receiving funding, the project manager will need to track and report on the project’s progress. Performance tracking is essential for three reasons:

  1. It allows the decision-making body to see how well the investment performs.
  2. It ensures that the project stays on track and does not exceed its budget.
  3. Tracking progress makes it easier to determine whether or when withdrawal becomes necessary.

Why Is the Capital Acquisition Request Process Important?

The capital appropriation request process provides two main benefits. First, it ensures that businesses have the necessary funds to grow and innovate. Second, it helps to ensure that project managers responsibly use these funds.

By developing a detailed proposal and submitting it for approval, businesses can avoid confusion or misunderstanding about the project’s purpose or costs. It also compels business managers to focus on the objective value and feasibility of projects when determining what to pursue.

What Are Some Common Reasons for the Denial of a Capital Acquisition Request?

Sadly, not all project proposals gain positive responses. These are some of the most common reasons governing bodies choose not to fund a project:

  • The governing body believes the project is not in the business’s best interests.
  • The expected costs of the project outweigh the potential benefits.
  • The project does not fit with the overall strategy of the company.
  • There is not enough information about the project to make a decision.

More often than not, when investors deny requests, they provide reasons for doing so. Business managers can review these reasons to determine whether to appeal and how to do so.

How Can Account Receivables Automation Help With Funding Approvals?

Investors look at more than just the business proposal when determining whether to allocate funds. Cash flow and other key performance metrics also play a role. Automating the AR process boosts cash flow and reassures investors that funds allocated will be used for the intended purpose, instead of accounting for working capital deficits.

Those that are familiar with the workforce management space need no introduction to Monday.com and its powerful work OS tool. Monday.com recently moved to an automated accounts receivable (A/R) collection system, powered by Gaviti, to replace its outdated annual reporting methodology.

From Monday.com’s accounts receivables department:

With our business and sales growing exponentially, Gaviti has been a key tool in ensuring our DSO has not only stopped increasing but also shown improvements over a relatively short period of time. The ease of use combined with a highly responsive and helpful team… We have been able to quickly implement a comprehensive and versatile collections process.

When you stop to consider the broader, organizational benefits of automated A/R solutions, it’s easy to understand why Monday.com was so successful. The right A/R collection software can improve cash flow as well as the performance of key metrics – such as days sales outstanding (DSO) – within your organization.

Improve DSO Collection Processes

At its core, DSO collection is a cash flow problem. According to a U.S. Bank study, 82% of businesses fail due to poor cash flow management.

Part of this issue is attributable to the time-consuming processes inherent in manual collections. DSO collections and cash flow already vary from month to month. When you add the time spent managing spreadsheets across late payments, grace periods, and lines of credit, you have an untenable system where staff spends more time corralling reports than processing payments. And while you may not enjoy managing the nitty-gritty details of your business’s finances, your financial processes are ripe for optimization. Consider just a few ways that accounts receivable collection software can streamline your enterprise DSO:

When you work to improve your accounts receivable collection, you’re working toward a healthy financial process where DSO stays low. But that’s not the only benefit of an A/R collection solution.

Stay Informed

5 Benefits of Automated Accounts Receivable Collection

In any discussion about the benefits of accounts receivable automation, it’s important to cover the broader benefits it provides:

  1. Better staff efficiency by reducing the manual hours required to perform collections tasks – all those hours you spend chasing invoices, calling clients, or writing follow-up emails add up.

  2. Ensure your data’s accuracy – real-time accurate data will prevent your company from making errors.

     

The benefits of the accounts receivable collection software are clear, and once you’ve deployed
automation,
you’ll have a hard time going back.

A/R Collections Best Practices

Although automated accounts receivable software brings a new dimension to your financial processes, the fundamentals of accounts receivable best practices remain the same. It’s a straightforward process that nevertheless tends to get bogged down by inefficiency. This is where automation software pays off.

Consider how you can leverage financial technology like this throughout your organization to improve key financial metrics. Technology is one option. Outsourcing accounts receivable collections to a service provider that can handle all the details for you is another. You have plenty of options, and now it’s just a matter of selecting which improvements will yield the best results for your enterprise.

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