What Is An Expense Report?
Expense Report: A Travel Expense Report is an organized way for businesses and their employees to track and report their expenses for business-related trips. The expense report is usually a printed form or a spreadsheet that is filled out and kept for accounting and tax purposes. Because of this, it is especially important to track any expenses that are tax deductible.
For a quick solution, instead of making your own expense report in Excel or Google Sheets, download and use one of our free Expense Report Templates below. Easily customize the spreadsheet by adding your company information and other details, then share the file with your employees.
Expense Report Template
What Is an Expense Report?
An expense report is a form that tracks business spending. An expense report form includes any purchases that are necessary to run a business, such as parking, meals, gas or hotels, according to Entrepreneur.
An expense report can be prepared using accounting software or using a template in Word, Excel, PDF and other popular programs.
WHAT AN EXPENSE REPORT LOOKS LIKE
An expense report typically has columns such as:
- Date: the date the item was purchased
- Vendor: where the item was purchased
- Client: what client the item was purchased for
- Project: what project the item was purchased for
- Account: instead of client or project fields, an account number can be used
- Author: who purchased the item
- Notes: additional clarifying notes
- Amount: total cost of the expense, including tax
Below is a basic example of an expense report. This report generates expenses according to tax category, like rent (we’ll cover this below). There’s a subtotal per category and then a grand total. Create an expense report according to a date range, export it to Excel or print it.
If your employees spend a lot of money in cash, you need to make sure you have them list these expenditures on an expense report form. Have them attach the receipts to the back of the form so you can double check the entries on the form against the actual receipt. You or your bookkeeper will then add in the expense codes and write them a check for reimbursement of the expenses.
Expense Report Form
An expense report is commonly used for recording business travel expenses such as transportation, food, lodging, and conference fees. But an expense report can also be used to document any business expense for which an employee needs to be reimbursed. For example, you can use an expense report to track mileage and gas used on the job, meetings with clients that include meals or other entertainment, or even office supplies purchased by an employee. An expense report provides an accurate record of business costs, which is important for budget planning and tax reporting. Providing receipts for all expenses listed on a report helps prevent mistakes and prepares businesses for filing taxes and completing audits. Collecting expense reports from employees on a weekly or monthly basis can safeguard against budgeting errors and helps ensure that money is being well spent.
Depending on your business needs, an expense report may be lengthy and detailed or a simple form. It will typically include an itemized list of expenses along with a description for each item. Expenses may be separated into categories, such as mileage, meals, hotel costs, or employee training. If the report is specifically for travel, it may include information about the destination and reason for travel. Any advance payment for costs should be listed and subtracted from the total cost of reimbursement. It’s also important to include a signature line for approval and contact information for the person requesting reimbursement. For accurate record-keeping, the time period in which the costs were accrued can be listed.
Expense sheets can also be useful for creating a personal budget, whether you’re tracking monthly income and household expenses, embarking on a remodeling project, or planning a wedding. A personal budget tracks your primary expenses and may reveal where you can cut costs and increase savings. To address both personal and business needs, we’ve included a variety of free expense sheet templates below, from formal expense reports to simple budgets for personal and event planning. To use these Word and Excel expense templates, click on the download button, save the file to your device, and customize or print the template as needed.
We’ve also provided expense report templates in Smartsheet, a real-time work execution platform that empowers you to more easily track, share, and manage expense reports than in Excel.
Expense Report App
Expense tracking software from FreshBooks makes it easy to prepare your taxes, bill clients for expenses and track project spending without tons of manual input.
WHAT AN EXPENSE REPORT IS USED FOR
Small businesses with employees who often pay out-of-pocket for business expenses need to submit expense reports. The employee’s expense report will itemize all their reimbursable expenses. They should also attach receipts to the expense report. The owner can then review the expense report for accuracy and reimburse the employee for the total.
A small business owner can also use expense reports to review their total expenses over a particular reporting period–usually a month, quarter or year. The owner can see if total expenses were more or less than expected and analyze the results, according to Accounting Tools.
BUSINESS EXPENSE CATEGORIES
Taxes are another big reason small businesses need to use expense reports. Many business expenses can be written off in a company’s taxes. This article covers all the most common deductible expenses for freelancers, the self employed, sole proprietors, contractors and more.
Deductible business expenses include travel costs, rent, insurance, interest on business loans and car expenses, according to the IRS. Generating an expense report helps you (or your accountant) easily add up all expenses so they can be input into tax forms. The IRS has standard categories they use in their forms. You enter your total expenses per category.
- For example, a sole proprietor would use Schedule C in addition to their personal tax return form. If they had $1000 worth of advertising expenses, they’d enter $1000 in the advertising line.
It is important to use the IRS’ categories in your expense reports. This will help you do your taxes faster.
Travel Expense Report
An expense report is a form completed by employees to itemize the expenditures for which they are requesting reimbursement. Receipts are typically attached to the form if the related expenditure amounts exceed a certain minimum amount. The employer then examines the submissions for accuracy and validity, and pays employees the requested amounts. The employer can then record the reimbursed amounts as a business expense, which factors into the amount of accounting profit and taxable profit recognized.
Expense reports can also be used to detail expenditures made against an initial employee advance. If so, the employer still records the submitted amounts as a business expense, but there is no reimbursement; instead, the employer deducts the expenditures from the amount of the employee advance.
An expense report can include a number of company-specific information fields, but usually requires at least the following core information:
- Date on which an expenditure was incurred (matches the date on the related receipt)
- The nature of the expense (such as airline tickets, meals, or parking fees)
- The amount of the expense (matches the amount of the related receipt)
- The account to which the expense should be charged
- A subtotal for each type of expense
- A subtraction for any prior advances paid to the employee
- The grand total of the amount of reimbursement requested
An expense report form may also include a summary of the employer’s travel and entertainment policy, which defines which expenditures will not be reimbursed by the company (such as in-room entertainment expenditures).
The expense report concept can also refer to a detailed listing of expenses incurred by each department of a company for a reporting period. This information is examined to see if any actual expenses incurred were different from expectations, in which case management can investigate the reasons for these variances.
What is an expense report in accounting?
How do I make an expense report in Excel?
- For each expense, enter the date and description.
- Use the dropdown menus to select payment type and category for each expense.
- For each expense, enter the total cost.
- Attach all necessary receipts to the document.
- Submit for review and approval!
How do I create an expense report?
- Choose a template or expense-tracking software.
- Edit the columns and categories (such as rent or mileage) as needed.
- Add itemized expenses with costs.
- Add up the total.
- Attach or save your corresponding receipts.
- Print or email the report.