What is an expense report?
An expense report tracks the items and services that you purchase for work. Expense reports are often used for business travel so employees can be reimbursed at a later time, but they can be used to record everyday expenses, too. Common examples of expenses to record during business travel are transportation, meals, parking, and hotels.
What does an expense report include?
An expense report typically includes an itemized list of each purchase an employee made that needs to be reimbursed. The report also usually includes:
- Date: When the purchase was made.
- Vendor: Where the purchase was made.
- Amount: The transaction amount, including tax.
- Employee: Who made the purchase.
- Description: An explanation of the expense.
- Category: The type of expense, such as transportation or meals.
- Total: The total amount of expenses to be reimbursed.
You may also record:
- Client: The client associated with the expense.
- Project: The project associated with the expense.
- Notes: Additional details related to the expense you want to track.
Importance of expense reports
An expense report is a helpful tool business owners can use to reimburse employees and accurately report business expenses for tax purposes. This expense report template makes tracking business purchases easier and more accurate than relying solely on pen and paper.
Additionally, this expense report template for Excel, Google Sheets, PDF, and Word can help you with:
Accurate reimbursements
As a business owner, you want to make sure that you reimburse your employees for the right amount. Having team members file an expense report is a simple way to verify their work expenditures.
Accountability
Creating an itemized expense report builds accountability into your employees’ business travel. This way, you know exactly what you’re reimbursing them for and make sure you only pay them back for business-related expenses.
Cost analysis
Recording expenses every time an employee travels can help you understand the categories and clients where you spend the most money. Insights from expense reports enable you to make data-driven decisions about your business’s finances. According to one report, 55% of companies use expense management data to inform financial activities, like annual budgeting and planning.
