A cost category is an individual division (or parent) that allows you to organize your cost codes (or children) with numeric alignment. Organizing cost codes within cost categories provides the ability to differentiate and track common costs, such as labor, at a more granular level in financial reporting.

While cost categories can be defined by anyone, there are some standard categories which are widely used for building projects in the U.S. and Canada, such as the 16 divisions defined by Construction Specifications Institute (CSI)'s MasterFormat.