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# How to Create Expense Types
**Overview**
Expense Types allow you to categorize the costs incurred during a project, such as "Labor," "Transportation," "software Licenses," or "Hardware." By defining these categories, you can track project budgets more accurately and generate detailed financial reports to see exactly where money is being spent.
#### **Step-by-Step Guide**
**1. Navigate to Expense Type Settings**
Access the expense configuration section from the project settings menu.
* From the main menu, go to Settings (1).
* Under the `Project` section (2), click on Expense Types (3).
* Click the Add Expense Type button (4) in the top right corner.
2. **Define the Expense Category**
In the pop-up window, enter the name of the new cost category.
* Name: Enter a clear, descriptive name for the expense type (e.g., `Labor`).
* Click Save to add the category to your system.