Manual expense reimbursement processing can be time-consuming and error-prone, causing delays and frustrations. Plus, businesses that don't have a standardized reporting system may lack visibility into their spending patterns.
Employee expense reports can help alleviate these issues by giving you a structured and effective way to manage employee-related expenses. They also help you ensure workers are only using company funds for legitimate business expenses.
In this article, we go in-depth about what an employee expense report is, its importance, and how to create and fill one out. We also give you a bonus template to help you craft an employee expense form quickly.
What is an employee expense report?
An employee expense report is a document that employees use to track expenses incurred while performing work-related tasks. It helps employers monitor and control spending within the company, as well as reimburse staff members for any out-of-pocket payments they’ve made.
Business expenses include airfare, car rentals, meals, travel , lodging, professional license fees, and much more.
Having workers submit thorough expense reports means you can better monitor spending, set spending limits, and keep finances transparent. An expense management platform guides your employees through the process of filling out the report and submitting it for your accounts payable department to review.
What should you include in an employee expense report?
Employee expense reports can differ in structure based on your company's policies and the reporting tool or template you use. Here are some common variables you can expect to find in most employee expense reports.
Employee details: The employee’s name, ID, department, and contact information
Expense details: The date, type, purpose, and description of the expense
Amount: The amount spent on each expense item, including any taxes or tips
Receipts: Fields for attaching copies of receipts or invoices for each expense item
Approval: A field for the signature or approval from a manager or supervisor, if required by company policy
Reimbursement request: The total reimbursement amount
Why is an employee expense report important?
Employee expense reports have many benefits. Here are just a few of them:
Help to track business expenses
Employee expense reports are a structured way to track all the costs your employees pay out of pocket. This can even help you identify cost-saving opportunities.
On top of that, it's easy to analyze your employees’ spending patterns and generate reports for management or accounting purposes.
Automate reimbursement approvals
Digital report submissions streamline expense tracking and eliminates the need for manual paperwork.
Integrating your expense management capabilities into your accounting software makes processing each employee's expense report for reimbursement easy. An automated expense management system helps you route scanned reports to the appropriate personnel, helping you stay compliant with the set time limit for approvals.
Enhance policy compliance
Employee expense reports help enforce internal policies, since employees need to review their work-related expenses before they ask for reimbursements. Asking for receipts also uphold the legitimacy of the expenses you need to reimburse.
If you have an automated approval workflow, assigned personnel can double-check each expense report as it’s uploaded to confirm policy compliance. You can also automatically configure expense management software to check expenses against company policies.
Help in budgeting and planning
An employee expense report is a valuable tool for comparing actual expenses to budgeted amounts. This means that you can effectively identify any discrepancies in costs and adjust. Enforcing company expense policies that define employee expense reimbursement can easily prevent overspending.
In short, expense reports help you understand where your employees are spending money and identify opportunities for reduction or reallocation.
Analyzing expense reports also helps you accurately forecast future expenses and budget for upcoming projects.
Streamline tax filing
An employee expense report helps document business expenses and identify tax deductions. Clearly documented reports help minimize audit risks.
Receipts included in expense reports provide proof of actual expenditure that may substantiate any deductions claimed on tax returns.
Further, expense reports often categorize expenses, making it easy to identify tax-deductible expenses and file correct tax returns. With an aggregated report of all expenses, it's easier to transfer this information to tax forms.
How do you create an employee expense report?
You can generate an expense report from scratch using Microsoft Excel or Google Sheets, or auto-populate a report with an HR platform.
Microsoft Excel
Here’s how to create an expense report in Microsoft Excel:
In Excel, select “new” from the left menu. Alternatively, select “view more templates” if templates are displayed close to the top of the initial screen.
Search for “expense report”
Select and click on your preferred template
Click on the “create” icon
Use the template or save it for later use
Google Sheets
Now for the steps to generate an expense report using Google Sheets:
Select “file,” then “new,” then “from template gallery”
Search for the “expense report” template and select it
Use the template or save it for later use
Remote expense reports
If you want to quickly create an appealing template that you can reuse for different purposes, then Remote is your answer. Remote makes it easy to manage your business expenses through our HR management platform.
Many businesses use Remote to keep track of their costs. For example, Gusto customers reimburse their employees directly in Gusto, powered by Remote.
Remote also helps you generate individual expense reports with just a few clicks. Here are the required steps:
Go to the “expenses” tab
Select “all requests”
Use the search function to filter out specific employees
Click on “export data” to download a CSV file of the report
Employee expense report template and how to fill it out
We’ve included an overview that you can use to guide your staff on how to fill out an expense report.
1. Download the expense report form
Most companies provide a standard expense report form. If not, you can create one using a spreadsheet program, like Excel or Google Sheets, or download the template we’ve made for you below.
A template should contain sections for:
Employee details, like their name, employee ID, department, and contact information
A field for adding the current date and purpose of the form
Expense details, such as the date, type, purpose, and description of each expense
The amount spent on each expense item, including any taxes or tips
A space for attaching copies of receipts or invoices for each expense item
A space for a signature or approval from a manager or supervisor
The sum of all expenses
2. Enter your personal information
Once you’ve downloaded the template, you can start keying in your personal details. At the top of the form, fill in your name, employee ID, department, and other required personal information.
3. Indicate the date and the purpose of the expense
Next, add the date and the purpose of the expense report. For instance, you could state that the expenses are for a business trip to a technology conference.
4. Fill in the expense details
Enter the relevant details of each expense, including the amount, category (such as meals or travel), and any necessary notes.
5. Calculate the total cost
Proceed to calculate the total amount for each category and the total for all expenses. Ensure that your calculations are correct to avoid having to go back and forth with the accounting team during the approval process.
6. Attach receipts
Collect all receipts for each expense incurred and scan them. Upload the images and double-check them to make sure there are no missing receipts.
7. Submit the report
Review your expense report one last time to check for any mistakes. Once you’re done, submit the completed report to your supervisor or the appropriate department for approval.
Take care of employee expense reports with Remote
An expense reporting system prevents unauthorized purchases and fraudulent receipts for reimbursement. It’s a simple but efficient way that helps you track employee spending and ensure your staff spends what you budget for.
Remote helps you reduce the cost of expense management for employees, no matter their location. With Remote , you can track and approve employee reimbursement requests with just a click.
For more information on how to simplify your expense management process, chat with one of our experts today.
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