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March, 2006 –
If you think you are making out like a bandit on that lease, it's time to re-read the contract. After all, the leasing company is making money, isn't it?
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Eaton Corporation, a large diversified industrial manufacturer with over 60,000 employees, 4 business units and customers in 125 countries, sought greater control over its lease management process.
Challenges
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Best practices for standardized lease analysis and execution across autonomous business units.
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Web-based process and internal controls required to ensure optimal financial decision making that is aligned with corporate finance policies.
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Compliance with Sarbanes-Oxley by clarifying lease authorization and reporting procedures.
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Solution
After selecting Captara for its enterprise lease management standard, Eaton's treasury department saw immediate benefits from our web-based, centralized solution. With Captara, the treasury department established corporate-wide financing policies that business units follow to continue their own leasing activities. The solution standardized the lease process by helping users analyze finance decisions, compare leasing proposals, select the optimal financing structures, and manage the lease over its life cycle. Eaton also deployed Captara's auditable processes to ensure proper characterization of capital or operating leases to meet Sarbanes-Oxley and FASB reporting requirements.
Results
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Present value savings of at least 5% on all leasing transactions.
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Identification and resolution of numerous leasing contracts that had unintentionally lapsed into evergreen status.
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Proactive and optimized management of each lease's key decisions including early buyout, return, and when appropriate, evergreen rent payments.
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Greater corporate control over Eaton's entire leasing process. Despite the challenge that leasing execution occurs in 4 autonomous business units, now all groups are trained on the Captara solution.
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"In the year following our decision to streamline and standardize our enterprise leasing process, Captara has helped us save over $2M in optimal financing decisions and avoidance of unnecessary evergreen rents."
– Bob Parmenter, Corporate VP & Treasurer, Eaton Corporation
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