What is an Expense Report?
An expense report is a form used to track business spending. It lists any purchases required to run a business. These may include:
- Accommodation Costs (for travel lasting more than 24 hours)
- Internet Costs
- Meals
- Magazine Subscriptions (connected to the job)
- Mobile Phone
- Parking
- Petrol
- Travel Costs (plane or train tickets, mileage)
Employees can use several methods to prepare an expense report. These include accounting software, an Excel spreadsheet, or a template.
Who Can Claim Business Expenses
Employees can opt for one of two reimbursement methods for their business expense reports. The method selected will depend on the amount incurred and the employee's preference for managing their expenses. The two methods are as follows:
- The 10% of taxable income deduction rule. A standard deduction applies by default if the employee doesn't choose another reimbursement method on their expense reports. It reduces the employee's income tax payable. This method accounts for the expenses the employee incurred during their employment.
- Actual costs incurred. When an employee pays lots of charges out of pocket, it may be preferable to claim for actual expenses incurred. This status allows the company to deduct all the employee's incurred costs so long as they provide receipts for each item.
Employees must complete their expense reports correctly to be reimbursed quickly for their expenses by their company accounting department. To save time and avoid having to resubmit their form or provide further information to the company, employees must submit a complete form every time.
What an Expense Report Form Looks Like
A typical expense report generally has the following columns:
- The date the employee purchased the item or incurred the expense
- The employee's full name and their employee identification number
- A description of the business expense or service purchased (meals, travel, accommodation, mileage, etc.)
- The amount spent, including tax
- The amount of VAT
- Additional notes, if required to provide further information about the claim
- The amount: Total cost of the claim, including taxes
- A space for the employee's manual or electronic signature
The receipts are then attached manually to the form. Alternatively, they may be scanned and submitted electronically.
Advantages of Using an Expense Report Template
Why would you choose to use a template for your company expense reports? Here are some reasons:
- A template provides a standardized document for all employees claiming employment-related expenses.
- The fields on the template lower the risk of oversight when completing the form. The employee will be able to tell at a glance whether they missed something.
- The template's fields make the expenses easier for the accounting department to process. The employee may be able to receive reimbursement more quickly as a result.
Process Expense Reports Quickly While Following Company Policy
Accounting software for expense reports can streamline the process of employees requesting reimbursement for their business expenses.
Each expense report submitted by an employee initiates an alert forwarded to the appropriate manager. That person is responsible for approving the employee's request or sending it back to the employee for editing and resubmission.
Make an Expense Report Easily with Mooncard
Mooncard provides you with an expense report template for your company. It allows you to easily track the business expenses incurred by your employees and their reimbursement requests. Our accurate, precise model assists you in managing your company expense reports.
Would you like to reimburse your employees and manage expense reports more easily? Do you want to eliminate paper expense reports? Mooncard offers an automated solution to manage expense reports with corporate cards. To learn more, contact us to request an online demo.
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