How to Make an Expense Report From Scratch

An expense report serves as a detailed record of money spent, typically for business purposes, but also useful for personal budgeting or tax documentation. Its general purpose is to provide a clear account of expenditures, enabling reimbursement from an employer or supporting deductions claimed on tax returns. Accurate expense reports support financial clarity and effective financial management.

Gathering Necessary Information and Documents

Creating an expense report begins with collecting specific information and supporting documentation for each expenditure. For every item, you will need the date the expense occurred, the vendor or merchant name, and the exact amount spent. The specific purpose of the expense and the method of payment used, such as a credit card or cash, are also necessary details. This information is important for proper classification and for meeting substantiation requirements, particularly for business expenses.

The purpose of an expense is especially important for tax purposes, as the Internal Revenue Service (IRS) requires certain expenditures to be ordinary and necessary for business operations to be deductible. The IRS emphasizes documenting the business reason for costs like travel, gifts, and car expenses. Without a clear purpose, an expense may not qualify for reimbursement or a tax deduction. Accurately recording the payment method helps reconcile the expense with bank or credit card statements, ensuring no transactions are missed or duplicated.

Supporting documentation, primarily receipts, is crucial for any reliable expense report. These can range from traditional paper receipts to digital receipts received via email or text message. Other acceptable forms of documentation include detailed invoices, canceled checks, or credit card statements, especially if a specific receipt is unavailable. Under IRS guidance, taxpayers must keep records that support income, deductions, and credits shown on tax returns.

Organizing these documents as expenses are incurred simplifies the process later and helps ensure accuracy. Immediately scanning paper receipts and saving digital receipts into dedicated folders on a computer or cloud storage system is an effective strategy. Alternatively, maintaining a physical envelope or folder specifically for paper receipts can keep them consolidated and accessible. This ensures all necessary inputs are readily available when compiling the expense report.

Creating Your Expense Report

After gathering all necessary information and supporting documents, the next step is to compile these details into a structured expense report. Common approaches include using spreadsheet templates, dedicated expense management software, or mobile applications. Many companies also provide their own systems or portals for employees to submit expenses, which often come with pre-defined categories and workflows. The chosen method should align with personal preference or organizational requirements.

Inputting the collected information requires careful attention to detail. Each expense should be entered into the chosen format, ensuring that the date, vendor, amount, purpose, and payment method are accurately transferred. Categorizing expenses correctly is another important step, aligning with common financial classifications such as “travel,” “meals,” “office supplies,” or “client entertainment.” For business expenses, accurate categorization is important for tax compliance.

Reviewing the completed report for accuracy and completeness is an important final step before submission. This involves cross-referencing the entered data with the original receipts and documentation to catch any discrepancies or omissions. Ensuring adherence to any relevant guidelines, such as company policies on spending limits or specific documentation requirements, prevents delays in processing. This review confirms the report accurately represents expenditures.

Dedicated expense management software or company-provided systems often include features that automatically flag potential policy violations or missing information, streamlining the review process. Even when using a simple spreadsheet, a thorough manual review is necessary to verify every detail. This ensures the report is ready for the submission phase without requiring further revisions.

Submitting and Tracking Your Report

Once the expense report has been completed and reviewed, the final stage involves its submission and tracking. Submission methods vary widely, encompassing online portal submissions, emailing the report and supporting documents to a recipient, or physically delivering a printed report to a department. For online portals, this often involves uploading scanned receipts or digital files directly into the system. It is common to be required to provide a digital signature or certify the accuracy of the report before final submission.

After submission, it is important to understand what to expect regarding processing timelines and potential follow-up communications. Many organizations provide a confirmation receipt, either through the online system or via email, acknowledging the report’s successful submission. The processing timeline for reimbursement can vary, ranging from a few business days to several weeks, or even one to two billing cycles for credit card reimbursements. Occasionally, the processing team may contact you for clarification or additional documentation if there are questions about specific expenses.

Retaining a copy of the submitted report, along with all supporting documentation, is a good practice. This personal record serves as proof of submission and provides a reference point for any future inquiries or audits. Whether it is a digital file saved on your computer or a physical copy in a dedicated folder, having this backup is important. You can track the status of your report through an online portal if one is available, or by contacting the relevant finance or accounting department directly. This allows you to monitor its progress until reimbursement or final processing is complete.