Payee vs. Expense Category: What Is the Difference?

A payee answers “Who did we pay?” An expense category answers “Why did we spend the money?”

Example: employee salary

• Payee: the employee’s name
• Category: Salary or Payroll

More examples

• Payee: Building Owner; Category: Rent
• Payee: Electric Company; Category: Utilities
• Payee: Local Newspaper; Category: Advertising

Using both fields consistently makes expense history and financial reporting much easier to analyze.