What is capital expenditure (CapEx)?
Written by Shivangi Singh, Senior Content Writer · October 19, 2026
CapEx versus OpEx
- CapEx buys or extends an asset. A new packaging line, a warehouse extension, a fleet of forklifts.
- OpEx (operating expenditure) keeps the business running day to day. Raw materials, utilities, rent, maintenance contracts, salaries.
The split matters for tax, for reporting and for approval. CapEx is usually budgeted annually, approved at board or CFO level, and tracked as a project rather than a purchase.
Common examples
- New or replacement production equipment
- Factory, office or warehouse construction and fit-out
- Vehicles, cranes and other heavy mobile assets
- Data centres, servers and network hardware
- Major software platforms with multi-year licences
Why procurement cares
CapEx purchases are high value, infrequent and hard to reverse. A single contract can be worth more than a year of indirect spend, so the sourcing process is longer: technical specification, pre-qualification of suppliers, multi-round negotiation and often a reverse auction on the final shortlist. The buying process for this category is covered in What is CapEx procurement?.
Shivangi is a Senior Content Marketer specializing in B2B SaaS, procurement, and enterprise technology. She creates research-driven content that helps procurement leaders and business decision-makers navigate AI, digital transformation, sourcing, and spend management. Her work focuses on turning complex industry developments into clear, practical, and actionable insights.