Capex (short for “capital expenditures”) and Opex (short for “operating expenditures”) are two important accounting terms used to describe how a business funds its operations. Capex is money that is spent on purchasing or maintaining physical assets, such as machinery, buildings, or software. This kind of spending is often planned in advance and is capitalized over time. Opex, on the other hand, covers the day-to-day operations of the business — salaries, utility bills, rent, and so on. This type of spending is generally considered to be more immediate and less long-term than Capex. It’s important to understand the difference between Capex and Opex when it comes to budgeting and forecasting expenses because they can have a big impact on your bottom line.