CAPEX Approval Series
Capital Expenditure Approval Workflow
Who approves what, at which value threshold, and which documents each gate requires — the workflow industrial capital requests actually move through, from idea registration to post-implementation audit.
The workflow below is the common industrial pattern. Names differ between companies, but the sequence rarely does: a request is registered, tested against the capital plan, compared against alternatives, priced, specified, funded, authorised at the right level and then audited against the case that justified it. It is the operational companion to the CAPEX approval process — that page explains what each stage must prove; this one explains who signs and when.
The approval gates in sequence
Gate 0 — Idea registration
Is there a measured operational constraint, and does it belong in this budget cycle?
Owner: Plant or department manager
Required: One-page problem statement with baseline data.
Gate 1 — Budget inclusion
Does the request fit the approved capital envelope, or is it an unbudgeted exception?
Owner: Finance planning / controller
Required: Cost range, funding year, capital plan reference.
Gate 2 — Options and concept review
Have do-nothing, debottleneck and invest options been compared on the same basis?
Owner: Engineering lead
Required: Options table with cost, risk and time-to-benefit.
Gate 3 — Business case review
Does payback, NPV and IRR clear the hurdle rate under a downside case?
Owner: CFO or finance committee
Required: Financial model, TCO comparison, sensitivity run.
Gate 4 — Procurement readiness
Is the specification frozen and the scope boundary identical across quotations?
Owner: Procurement director
Required: Technical specification, scope-of-supply matrix, RFQ pack.
Gate 5 — Financing confirmation
Is the funding route confirmed and are eligibility conditions satisfied?
Owner: Treasury / finance director
Required: Funding plan, indicative terms, lender or lessor conditions.
Gate 6 — Authorisation
Is residual risk acceptable and is delivery ownership assigned?
Owner: Executive committee or board, by threshold
Required: Signed capital request, risk register, delivery plan.
Gate 7 — Post-implementation audit
Did the asset deliver the benefit the case promised?
Owner: Internal audit or finance
Required: Post-audit report against original assumptions.
Authority thresholds: who signs at which scale
Value bands are company-specific, so the scale language below is deliberately relative. What matters is that the band is defined in writing before the request is raised — ambiguity about the approver is one of the most common causes of a lost budget cycle.
Small replacement spend
Approver: Plant or site manager
Usually pre-approved inside the annual maintenance capital envelope, with a simple justification note.
Mid-scale equipment purchase
Approver: Divisional director plus finance
Requires a full business case, comparable quotations and a total-cost-of-ownership comparison.
Large line or facility investment
Approver: Executive committee
Adds a formal risk review, financing plan and an independent technical opinion in many organisations.
Major or strategic programme
Approver: Board of directors
Board papers, funding structure, phased release of capital against milestones, and scheduled reporting.
Six reasons workflows stall
- The specification changes after quotations arrive, so the comparison has to be rebuilt.
- Do-nothing is never priced, leaving the committee without a benchmark to approve against.
- Only one supplier is quoted, which triggers a procurement compliance objection.
- Financing eligibility is checked after the supplier is chosen, forcing a re-tender.
- Installation, utilities, spares and training are missing from the number presented as CAPEX.
- No named delivery owner, so the committee defers rather than rejects.
Frequently asked questions
What is a capital expenditure approval workflow?
It is the sequence of gates a capital request passes through before money is committed: idea registration, budget inclusion, options review, business case review, procurement readiness, financing confirmation, authorisation at the correct threshold, and a post-implementation audit after commissioning.
Who approves capital expenditure?
Authority is normally set by value band. Small replacement spend is approved at site level, mid-scale equipment by a divisional director with finance, large facility investment by the executive committee, and major strategic programmes by the board.
How long does CAPEX approval take?
Where the request is inside the approved capital plan and documentation is complete, weeks is realistic. Unbudgeted requests, board-level thresholds and externally financed projects usually take months because financing eligibility and independent review run in sequence.
What documents are required for a capital request?
A problem statement with a measured baseline, an options appraisal including do-nothing, a financial model with payback, NPV, IRR and a downside case, a total-cost-of-ownership comparison, a frozen technical specification, comparable quotations, a funding plan and a risk register with named owners.
Why do capital requests get delayed?
Most delays are documentary rather than commercial: a moving specification, uncomparable quotations, an unpriced do-nothing option, financing eligibility tested too late, or costs such as installation and training left out of the figure presented to the committee.
Continue in the CAPEX approval series
Educational, supplier-neutral and financing-neutral
Global B2B Group does not sell equipment and does not represent lenders, export credit agencies or development banks. This material is published to help industrial organisations plan, structure and prepare capital projects. It is general information for decision-making, not financial, legal or tax advice.