An expense report categorization is a way for businesses to provide greater detail on how their spending is divided. It helps track spending by account or category, allowing businesses to make sure they stay within budget and adhere to fiscal responsibility regulations. Expense report categories can be broken down into various subsets, such as employee travel expenses, business-related purchases, and overhead costs. By providing detailed breakdowns of expenses, businesses can have an accurate picture of their spending habits and make adjustments accordingly.