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An expense report is a detailed account of expenditures incurred by an employee during business-related activities, primarily for the purposes of reimbursement. Expense reports can include travel expenses, meals, office supplies, insurance, and any number of other business-related costs. 

Expense reporting, by extension, is a description of the overall process of filling out an expense report form and submitting it to a company’s finance department for review. The document is then either processed for reimbursement or kicked back to the employee for correction. 

There’s much more to know about expense reporting, of course, and in this article we’ll take a deep dive into the topic, provide an expense report template, and give you some ideas to streamline the process. 

What is an expense report?

An expense report is a document that indicates the amount of money an employee spent on business-related expenses. Expense reports allow companies to review the expenditures employees incur on their behalf, verify that they’re accurate and in line with their expense policy, and reimburse team members for these purchases.

When employees pay for company expenses with their own money, they typically fill out an expense report to get those funds reimbursed. ‍Say you’re attending a business conference on behalf of your organization. At the very least, you’ll need to pay for your lodging, meals, airfare, and other travel expenses. But without access to a company card, covering these expenses upfront falls on you.

What is a monthly expense report?

A monthly expense report is a document that captures all the expenditures incurred by an individual or a business over the course of a month, categorized and itemized for easy analysis and budgeting.

Who fills out an expense report?

Employees are responsible for filling out expense reports and submitting them to the finance department. They collect receipts and document each expense to provide a detailed account for reimbursement. The reports are then submitted to the finance department or managers for approval, ensuring compliance with the company's expense policies and budget constraints.

What’s the difference between an invoice and an expense report?

Invoices and expense reports are often mistaken for one another, but in actuality function differently. The primary difference between an invoice and an expense report lies in their purpose and who creates them. An invoice is a request for payment issued by a seller to a buyer for goods or services provided. An expense report, on the other hand, is a document prepared by an employee to detail and seek reimbursement for expenses incurred on behalf of the company.

The expense reporting process

Here’s what the typical expense reporting process looks like, step-by-step:

  1. Employees incur expenses related to business activities and collect all relevant receipts and documentation.
  2. They complete an expense report form, entering details for each expense, including date, category, amount, and business purpose.
  3. The completed expense report, along with all necessary receipts and documentation, is submitted to a supervisor or the finance department for review.
  4. The report is reviewed for accuracy, policy compliance, and validity of the expenses.
  5. Any discrepancies or issues are communicated back to the employee to be resolved.
  6. Once approved, the report is processed for reimbursement by the finance department.
  7. The employee receives reimbursement for approved expenses, typically via direct deposit into their bank account.

Contents of an expense report

While there are many varieties of expense report forms, a typical one includes the following 8 components:

  1. The name, contact information, and department of the employee submitting the report
  2. The date every purchase was made
  3. A brief description of each business expense to provide context for the purchase
  4. The cost of each purchase
  5. The client, project, or event the expense was incurred for
  6. A subtotal of expenses by category (e.g., business trip, parking fees, entertainment)
  7. The grand total of the reimbursement amount requested
  8. Receipts to verify each purchase

What goes on an expense report?

An expense report can include a variety of expenses depending on the nature of your business. Here are some examples of expenses that can go on an expense report:

  • Travel expenses
  • Meal and entertainment expenses
  • Office supplies and equipment
  • Utilities and rent
  • Professional services
  • Subscriptions and memberships
  • Telecommunications
  • Insurance
  • Training and education
  • Marketing and advertising
  • Maintenance and repairs
  • Miscellaneous expenses

How should expenses be reported?

The expense reporting process starts with an employee submitting their expense report with attached receipts. The expense report is then reviewed and approved by a supervisor. Upon approval, the finance department processes the reimbursement. The reimbursed amount is recorded as a business expense and stored for accounting and tax purposes. Documentation, like receipts, are saved in the case of an external audit.

Sometimes, employees receive a pre-approved sum of money or a company card to cover business expenses. In these instances, expense reports are used to keep track of how much of the budget has been spent. Although the finance department still logs the amount reimbursed as a business expense, the employee doesn't receive any reimbursement and the finance team deducts the total amount spent from the employee's spending limit.

How to streamline expense reporting with Ramp

Despite their widespread use, manual expense reports can be time-consuming and demanding to fill out, track, and review. The onus is on individual employees to stay on top of each and every charge both from the reporting and review ends, which can present all sorts of issues. One way around this is to automate expense reporting

Ramp’s expense management platform is the easiest way to keep track of expenses, with a variety of tools for categorizing and reporting expenses in real time. The centerpiece of the expense management system is Ramp’s company card, which your employees can use for company expenses in lieu of swiping their own plastic. This takes the burden of them in terms of keeping track of receipts and paying off their credit card bills. 

Ramp’s expense management system has been adopted by companies around the world to simplify and automate their processes and streamline their expense reimbursements

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Content Lead, Ramp
Fiona writes about B2B growth strategies and digital marketing. Prior to Ramp, she led content teams at Google and Intercom. Fiona graduated from UC Berkeley with a degree in English. Outside of work, she spends time dreaming about hiking the Pacific Crest Trail one day.
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