Separating Capital vs Expense Type Requisitions
Coupa recommendation is that CAPEX (Capital project based spend) and OPEX (general expense) should be separated when submitting requisitions. Main reasons for separate requisitions for each type:
1. These two spend types would typically be approved by different people. If both appear on same requisition it can extend time to process a transaction as number of approvers could increase based on spend type and also increased total amount may bring in additional approvers on expense side that would otherwise need not review if spend was separated.
2. It is more efficient for approvers to see spend that is appropriate to them on a request as opposed to having to review through a mixed set of item lines to figure out ones that need their attention
3. Mixing the spend types on one transaction could lead to complexity on the Finance side as capital spend is allocated to a certain project or investment while operational expense is tied to cost center. Some ERPs also flat out reject purchase orders where lines are coded both to project and cost center based GL.