Expenses are unavoidable especially if you want your employees to efficiently execute their job functions during business operations. Since these expenses could not be helped and that you could not also expect your employees to pay for the business costs out-of-pocket, you just have to make sure that they will keep track and record all of the expenses made in an expense report form.
Just like any other types of reports, expense reports contain important details that are necessary for your business’s accounting process. Through expense reports, you can control the finances of your business and you can also manage the cash flow properly.
A basic expense report form should at least contain the following elements:
Here are some guidelines that can help you in having a smooth expense report process.
Before anything else, you have to first implement a firm but fair expense report policy that every single one of your employees must know and follow. Policies will help you in avoiding instances wherein you will be reimbursing individuals for their expenses that are personal and inappropriate. You must update your policies on a regular basis and that you must publicize it to your employees along with a clear explanation.
A complicated process does not warrant that the possibility of serious mistakes will be avoided—in fact, this could even make matters worst and simple matters become difficult to handle. If the process is too complicated to follow through, there is a high risk of people exaggerating their expenses just to compensate for the tedious process of claiming their reimbursements.
When you require your employees to always provide receipts, this does not mean that you do not trust them—this simply means that you know that the people dealing with the finances of your business would need the expense receipts to prove the expenditures made. Obtaining significant expense information ensures that there will be no delays in the administration, no potential problems with compliance, and no failures when it comes to reaching the minimum requirement for the proceedings.
Submitting and approving expenses on time is important in order for reimbursements to be released on time. You and your employees must work together in order to meet the set time frame. If your employees would fail to submit reports on time, approving them will also be delayed. And when the approval gets delayed, it will not only hurt the pockets who need reimbursement but it will badly affect the cash flow in the business and cause accounting nightmares.
It is important that authorizers or managers are accountable for both application and enforcement of your expense report policies. This also means that they have to engage with the management team, explain the expense report policies, and push back any expense claims that are non-compliant to the expense report policies. Making them accountable is also one way to drive compliance and promote behavioral improvement and enhancement among employees.
One of the reasons why it was difficult for people to submit and approve expense reports on time before is because they do not have the means to do so while they are out of the office. But in this digital age, it can now be possible to develop a process where you or your managers will be able to receive, check, and approve expense reports even if they are out of the office and your employees to submit expense reports while still on a business trip.
Contrary to the belief that conducting an expense auditing is an unwelcome intrusion, auditing can actually make the entire expense-related procedures work smoothly or at least better than without conducting one. It is in auditing your processes and receipts that you will iron out any existing glitches, maintain a fair system, and ensure that receipts would match your employees’ claims.
For anyone to fill out an expense report form, one must make sure that you have already familiarized yourself with the different types of expenses that are commonly recognized in financial statements:
While there are no fixed sizes for expense reports, most of the templates that we have uploaded here in this article comes in A4 and US Sizes. You can never go wrong when you choose any of these sizes because you can find and buy papers that comes in these sizes and you can also print them in most printers.
Here are answers to the most frequently asked questions surrounding expense reports.
Expense reports are used by employees in itemizing the expenditures incurred for which they would request for reimbursement. Expense reports would often come along with a proof of purchase. An expense report can be produced monthly, quarterly, or yearly.
There are various tasks that involve in creating an expense report, some of it includes entering the basic expense report information, selecting the existing bank charges, entering the necessary detailed expense report information and the accounting information, and working with credit card statements.
We hope that you have learned how to create an expense report with the help of this article.