An expense report is a list of all the expenses your business has incurred over a specific period of time. In some cases, it can also refer to a list of expenses incurred by a specific employee. The Canada Revenue Agency (CRA) allows you to deduct almost all business expenses on your tax return, so it’s important to track expenses closely. And who doesn’t love a tax deduction?
What is the Purpose of an Expense Report?
Many companies will pay-out their employees expenses. Most employees will pay out-of-pocket for business-related expenses, which means they are able to submit a report to their company's accounting department. When submitting an itemized report it should come with all the appropriate receipts.
Expense reports can be submitted weekly, monthly, quarterly, or annually.
What is Included in an Expense Report?
You can find the following items on the typical expense report:
- Account Number
- Total Amount
Best Expense Reporting Practices
Follow these tips when implementing an expense report policy in your small to medium sized business.
Automate the process
Using software to keep on top of your company’s expenses is the easiest, and most accurate way to track expenses. QuickBooks will allow multiple users for one account, which means your employees can submit their expenses through the software which will keep all of your paperwork in one spot. Completed reports are automatically sent to the correct approver, while receipts are automatically matched to the correct expense report.
Create a clear and concise policy
It's important to set clear rules for all your employees to follow. If your employees are aware of how to submit expenses correctly. Set rules about spending limits and create a list of what your employees can and cannot expense. Make sure these rules are accessible to all employees.
Process reimbursements quickly
No one likes to wait weeks to be reimbursed for business expenses. Be sure to have an organized system in place to ensure your employees get paid quickly.
Enforce your policies
After you spent all this time creating your expense report policy, it's important to enforce these rules. Accounting software will have rules built in and any violations will be flagged immediately. If your employees are submitting expense reports manually, it'll be up to you or your accounting team to catch any violations.
Keeping up With Your Company’s Expense Reports
What are the benefits of tracking your business expenses with an app? Apps can help you track expenses, and when you import this information to accounting programs, you can easily create expense reports. In addition to including expenses on your tax return, you also want to track them so you know where revenue is going. With the right strategies, that information can help you increase profit margins, lower spending, and achieve other business goals.
Making your business a success takes hard work and organization. You don’t want to spend any more money than necessary on your tax bill. With QuickBooks Online, you can organize your business finances and stay ready for tax time. Try it free for 30 days.