diff --git a/src/pages/iou/request/step/IOURequestStepCategory.tsx b/src/pages/iou/request/step/IOURequestStepCategory.tsx
index 3877ffd5a3d9c..8e4f7bb93f056 100644
--- a/src/pages/iou/request/step/IOURequestStepCategory.tsx
+++ b/src/pages/iou/request/step/IOURequestStepCategory.tsx
@@ -27,7 +27,7 @@ import {isCategoryMissing} from '@libs/CategoryUtils';
 import Navigation from '@libs/Navigation/Navigation';
 import {hasEnabledOptions} from '@libs/OptionsListUtils';
 import {isPolicyAdmin} from '@libs/PolicyUtils';
-import {getTransactionDetails, isGroupPolicy, isReportInGroupPolicy} from '@libs/ReportUtils';
+import {getReportOrDraftReport, getTransactionDetails, isGroupPolicy, isReportInGroupPolicy} from '@libs/ReportUtils';
 import {isExpenseUnreported} from '@libs/TransactionUtils';
 import CONST from '@src/CONST';
 import ONYXKEYS from '@src/ONYXKEYS';
@@ -57,8 +57,9 @@ function IOURequestStepCategory({
     const isUnreportedExpense = isExpenseUnreported(transaction);
     const {policyForMovingExpenses, policyForMovingExpensesID} = usePolicyForMovingExpenses();
     const isCreatingTrackExpense = action === CONST.IOU.ACTION.CREATE && iouType === CONST.IOU.TYPE.TRACK;
-
-    const policyIdReal = getIOURequestPolicyID(transaction, reportReal);
+    const transactionReport = getReportOrDraftReport(transaction?.reportID);
+    const report = reportReal ?? reportDraft ?? transactionReport;
+    const policyIdReal = getIOURequestPolicyID(transaction, reportReal ?? transactionReport);
     const policyIdDraft = getIOURequestPolicyID(transaction, reportDraft);
     const [policyReal] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY}${policyIdReal}`, {canBeMissing: true});
     const [policyDraft] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY_DRAFTS}${policyIdDraft}`, {canBeMissing: true});
@@ -71,7 +72,6 @@ function IOURequestStepCategory({
     const [policyTags] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY_TAGS}${policyID}`, {canBeMissing: true});
     const [policyRecentlyUsedCategories] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY_RECENTLY_USED_CATEGORIES}${policyID}`, {canBeMissing: true});
 
-    const report = reportReal ?? reportDraft;
     const policyCategories = policyCategoriesReal ?? policyCategoriesDraft;
     const policyData = usePolicyData(policy?.id);
     const {currentSearchHash} = useSearchContext();
diff --git a/src/pages/iou/request/step/IOURequestStepConfirmation.tsx b/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
index e767e20613ddd..25564bdf6dde8 100644
--- a/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
+++ b/src/pages/iou/request/step/IOURequestStepConfirmation.tsx
@@ -170,10 +170,15 @@ function IOURequestStepConfirmation({
     /*
      * We want to use a report from the transaction if it exists
      * Also if the report was submitted and delayed submission is on, then we should use an initial report
+     * Additionally, if neither reportReal nor reportDraft exist, we fallback to the transactionReport
+     * to ensure proper navigation after expense creation.
      */
     const transactionReport = getReportOrDraftReport(transaction?.reportID);
-    const shouldUseTransactionReport =
-        transactionReport && !(isProcessingReport(transactionReport) && !policyReal?.harvesting?.enabled) && isReportOutstanding(transactionReport, policyReal?.id, undefined, false);
+    const reportWithDraftFallback = useMemo(() => reportReal ?? reportDraft, [reportDraft, reportReal]);
+    const canUseReport = !(isProcessingReport(transactionReport) && !policyReal?.harvesting?.enabled) && isReportOutstanding(transactionReport, policyReal?.id, undefined, false);
+
+    const shouldUseTransactionReport = !!transactionReport && (canUseReport || !reportWithDraftFallback);
+
     const report = useMemo(() => {
         if (isUnreported) {
             return undefined;
@@ -181,8 +186,8 @@ function IOURequestStepConfirmation({
         if (shouldUseTransactionReport) {
             return transactionReport;
         }
-        return reportReal ?? reportDraft;
-    }, [isUnreported, shouldUseTransactionReport, transactionReport, reportReal, reportDraft]);
+        return reportWithDraftFallback;
+    }, [isUnreported, shouldUseTransactionReport, transactionReport, reportWithDraftFallback]);
 
     const policy = isCreatingTrackExpense || isUnreported ? policyForMovingExpenses : (policyReal ?? policyDraft);
     const policyID = isCreatingTrackExpense || isUnreported ? policyForMovingExpensesID : getIOURequestPolicyID(transaction, report);