capital expenditures
Financial Dictionary — Capital & Investment
Definition
Capital Expenditures The normal and necessary costs incurred to bring an item of property, plant or equipment to its condition for its intended use; These amounts are included in the asset account
Use cases, Example & Why it matters
Use cases
- Used in the purchase-to-pay cycle to validate invoices, approvals, and supporting documents.
- Used to strengthen internal controls over purchasing and supplier payments.
- Used to strengthen internal controls over purchasing and supplier payments.
Example
- Example: Before payment, the AP team applies **capital expenditures** to confirm the invoice matches the approved purchase documentation.
Why it matters
- Why it matters: Prevents incorrect/duplicate payments, reduces fraud risk, and improves accuracy of payables and expenses.