Capital and expenses are two important concepts in business accounting. Capital refers to the long-term investments of a company, such as purchasing facilities or equipment. Expenses, on the other hand, are the costs associated with conducting day-to-day operations. Generally, capital costs can be written off over a period of time while expenses need to be paid immediately. An effective approach to budgeting is to understand the difference between capital and expense, identifying which are most important for your business to succeed in the short and long-term. Making careful decisions about these two concepts will ensure that your business is profitable and well-positioned for future success.