An expense report is a document that employees use to request reimbursement for business-related expenses. Expense reports typically include a list of expenses, the category, description, and date of each expense, and receipts for any expenses that exceed a certain amount.
Purpose of Expense Reports
There are several reasons why accurate reporting is essential. First, they help businesses track their spending. By tracking expenses, companies can identify areas where they may be overspending and adjust accordingly.
Second, expense reports help companies to comply with tax laws. Businesses can deduct business expenses from their taxable income, but only if they can document them. Properly completed expense reports provide the necessary documentation.
Finally, expense reports help to protect employees. If an employee incurs a business expense and their company does not reimburse them, they may be able to claim the cost as a deduction on their tax return. However, the IRS may deny the deduction if the employee does not have documentation to support the expense.
Properly Completing an Expense Report
There are a few things that employees should keep in mind when submitting reimbursement reports.
First, they should ensure they only submit expenses eligible for reimbursement. Ask yourself these questions:
- Were these expenses incurred for a business purpose? Some reimbursable costs include overnight travel, client meals, and office supplies. Ineligible expenses include items such as driving to your usual place of work or buying a pair of dress shoes.
- Were the expenses “ordinary and necessary?” You should not submit lavish costs such as buying an expensive watch to wear to dinner.
Second, they should keep receipts for all expenses that exceed a certain amount.
Third, they should submit their expense reports on time.
By following these simple tips, employees can help to ensure that their expense reports are processed quickly and accurately.
Consider using one of these weekly or monthly templates as a guide. By following these tips, you can help to ensure that your expense reports are processed quickly and accurately.