We get it. Expense reporting can be challenging. That’s why we put together this expense reporting cheat sheet for when you need to get all the details—fast.
What is an expense report? When an employee travels or buys something for the company, they should be reimbursed for it. Those expenses are usually reasonable charges incurred while doing a particular job, and can include charges like meals, hotels, company supplies, printing materials, or flights. That’s where an expense report comes in. The employee will provide proof (usually with a receipt) of the purchase and then send in all related expenses (say from a business trip) within one report.
Then, that employee’s supervisor (or maybe even the HR representative) will review the report and approve (or deny) the requested reimbursement.
Why do people generally not like filing an expense report? It sounds like filing an expense report would be a good thing since it means getting back money, but the process of filling out a report can be long and complicated. A report can ask for information like:
- Date & time of purchase
- Purpose of the purchase
- To whom or to which department (within the company) it should be charged
- The subtotal of each different kind of expense
- Grand total
- How much the employee has been paid previously (in the form of an advance) subtracted from the grand total
If you’re filing for a long trip, that can mean a lot of work. Plus, there’s always the chance that it will get denied for not having enough information, so that could mean having to do it all over again.
What tools are out there to make expense reporting easier? A quick Google search will show you that there are plenty of software options for simplifying what can be a complex process. Here are a few options you should be looking for in this software:
- OCR (optical character recognition): Software with OCR is capable of scanning printed information and “reading” it, putting relevant information into relevant fields for you. For example, software with OCR would be able to “read” a receipt, and add in date, time, total, and merchant information into the expense report for you.
- Mobile access: Expense reports no longer have to be the thing employees have to do when they get back from a trip. Today, employees should have access to their expense reports on their mobile devices, allowing them to take a picture of their receipts, let OCR do the work, and then file their expenses as they go. Software with an intuitive mobile version is now a requirement for expense software.
- Cloud access: The best expense reporting software lives on the web, stored in the cloud, so that employees and admins (or approvers) can access their data from anywhere, anytime.
Why does it sometimes take a while to get reimbursed? While filing an expense report is a complex process, approving a report can also take a while because admins need to double-check and verify provided details.
Another complication comes in the form of business rules. Companies might have particular rules for how expense reports have to be handled. Perhaps one company allows an employee to be reimbursed for dessert or for wine with dinner, while another does not. That means that an administrator has to look at an expense report to make sure that they not only provided correct data that makes sense, but also that they followed the rules.
Another factor is that once an expense report is approved, it can take a while for the money to move from one account to the next. An innovation that solves this problem that you should be aware of is called “Same-Day Expense Reimbursement,” a process that not a lot of companies are taking advantage of yet, but it’s the next big thing in the world of expense reporting. Just as it implies, employees get reimbursed on the same day that they file their expense report. This is made possible because of automation. Some software is capable of reading an expense report and matching it to a credit card feed to verify that provided data is correct. Then, the report is approved and Same-Day ACH is used to transfer the payment from the correct account into the employee’s account.
What happens if someone enters information incorrectly (purposefully or not)? Falsified or just plain wrong information contributes to the time it takes for an expense report to be approved. If an approver, while manually looking over and matching receipts to dates and times and purchases, notices that the information doesn’t add up, then the expense report is denied. Luckily, a lot of this hard work can be done automatically with Auditing features that match receipts to transaction feeds.
Those business rules mentioned earlier also come into play here with an automated software system. The software can be set up to ensure that the expense report is following all the rules and then that all data is verified (through receipts or through matching expenses to transaction feeds from credit cards).
What are some tips for filing my first expense report? This doesn’t need to be a scary task. Here are a few tips to help you in filing your first (or your 1,001st) expense report:
- File as you go. Rather than waiting until the end of the month, send your information in when you first make the purchase.
- Always get a receipt. This one is pretty obvious, but it’s good practice nonetheless.
- Go paperless. Don’t lose your receipts! Take pictures of your receipts and email them to yourself or save them in your phone.
- Read the company rules on expense reports. Each company will be different, so read the employee handbook for details so that you know what will pass and what won’t.
- Think of your reputation. Expense reports may feel like free money, but the company is paying for it and they’re the ones that pay you. That means that it’s smart to handle the responsibility of expensing your purchases and travel to the company. It could mean getting passed over for a promotion if it looks like one employee expenses responsibly while another spends a lot more than their peers.
We hope that this guide has been helpful when it comes to understanding all there is to know about expense reports. If you'd like to know more about some of the innovations in expense report software, check out the FREE white paper below for details on what to consider when evaluating your options.
DATABASICS provides cloud-based, next-generation Expense Reporting, P-Card Management, Timesheet & Leave Management, and Invoice Processing automation. Specializing in meeting the most rigorous requirements, DATABASICS offers the highest level of service to its customers around the world.
DATABASICS is relied upon by leading organizations representing all the major sectors of the global economy: financial services, healthcare, manufacturing, research, retail, engineering, non-profits/NGOs, technology, federal contractors, and other sectors.