Expense Categories are important classifications of the costs incurred by an organization in the course of running its business. These categories provide crucial information about not only where money is being spent, but also why it is being spent. For example, an expense category could include human resources costs, marketing-related expenses, administrative costs, or externally sourced services. By breaking down expenses into more detailed categories, organizations can gain valuable insights that inform smart budgeting decisions. It’s essential for any organization to create effective expense categories and to accurately track their spending – doing so is the key to ensuring their long-term financial health.