What is capital allocation?
The decision about where a company's limited dollars go, such as product development, customer acquisition, additional employees, or administration. Founders face a legitimate capital-allocation problem with accounting because it consumes real resources and does not directly generate revenue.
Where you will use it: this term comes up in the Applied AI for Finance and Accounting course, and the full course glossary collects every term in one place.
Related terms
From the free Applied AI for Finance and Accounting course by Devon Coombs, CPA, MBA.