The Search for Lost Capital

For any exploration identifying the objective is the initial step. Our objective is to prevent lost capital or to recover it. How important is capital? For most corporations it takes $8 to $20 in sales to generate $1 in capital, therefore capital preservation is superior to generating sales.

A $500,000 cost savings or recovery has a sales equivalent of $4 to $10 million! What's your capital worth?

The success of the expedition depends upon engaging the best guide available. Capital Project Review Services, Inc. utilizes methods that have produced approximately $20 million in savings to date for owners and clients.

Uncharted Territory

Major capital spending projects generally range from $10 million to $2 billion, depending upon the importance to the owner and other factors. Manufacturing plant expansion projects and other sites are particularly fertile grounds for lost capital.

Skeptical about the existence of buried treasure in your project?Looking through this site will provide examples of real savings others nearly overlooked.

The Risks

Risks to capital are magnified and accelerated during capital spending projects. Among the contributing factors are technological change, unsuitable contracting methodologies, strained oversight capabilities, and prioritization failures. Learn more about the nature of project risks in Understanding Project Risks.Evaluate project risks through Project Risk Assessment.

The Tools

Successful exploration of lost treasure has always depended upon an adventurer with the right tools locate the bounty and to excavate it on site.

With capital spending projects the approach which best conserves capital, preventing losses before they occur, is to proactively implement comprehensive projects controls from inception to completion. A key element of this strategy is Capital Projects Auditing, including reviews of owner purchases, appropriations, and cost reporting.

Another element is Project Tax Planning for sales/use, property, income and other taxes.

Like the hurricanes that wrecked treasure ships, unforeseen calamities strike major spending projects. Necessities often override the importance of controls. Many executives rely on Construction Auditing for recovery of costs through reviews of construction contracts, engineering, materials, labor, and subcontracts.

Others use Tax Recovery Services to salvage some of their capital in the areas of sales/use, property, income, and other taxes.

The Adventurers

Who benefits from capital loss prevention and recovery efforts?

Project Managers

Internal Auditors

Chief Financial Officers

Operations Executives

Architects and Engineers

Tax Managers

The Journey

The Journey is filled with obstacles, not the least of which are the chasms between corporate departments with project responsibilities. Bridging these ravines with a proactive capital projects auditing function prevents avoidable losses of capital.How much of your capital falls victim to internal "turf wars" or reluctance of those with project authority to utilize others in your organization to assist in controlling projects? What are traditional, outdated project management concepts costing?The obstacles can be overcome where there is sufficient interest in minimizing loss of capital.

The Rewards

What types and magnitude of savings have been realized?

Labor

Materials

Tools/Equipment

Other Taxes

Diverse Savings

Freight

Systems

Accounting

Operations

Process Equipment

Financing

Contracts

General Contracts

Engineering

Electrical

Grading

Concrete

Mechanical

Structural Steel

Losses to Avoid

Avoiding costly traps, circumnavigating hostile forces, and preventing self-inflicted losses are critical to returning surplus capital to the treasury.

Learning from loss experiences can produce benefits.

The threats are both internal and external in nature.

The Legacy

Your Choice?

The superior results from implementing construction auditing have been widely reported. Visit the Internal auditors' savings page to see what others have achieved.

To learn more about the potential of capital project auditing and construction auditing, visit the news articles page.

If your organization is interested in the SUPERIOR RETURN offered by Capital Project Review Services, Inc., please contact CPRSLet's make your organization a part of a continuous success story of generating substantial cost savings and cost recoveries.

Contact CPRS