The Work Types folder allows you to categorise the different types of work. Every matter has a work type associated with it which lets you group matters involving the same type of work. For example, all matters regarding the sale of a domestic property would be attached to the Domestic Sale work type.
Work types must be attached to departments and are sub-divided into private, public funded, and firm work types. Each work type has an "income from costs" nominal associated with it and profit costs posted for bills on matters populate the appropriate costs nominal.