How to Process Expense Reports for Reimbursement

An expense report is a formal document detailing costs incurred by an individual on behalf of an organization. Its primary purpose is to facilitate the reimbursement of out-of-pocket expenses to employees or to account for company-issued funds. These reports are also instrumental for tax purposes, providing documentation for deductions and compliance.

Gathering Expense Information and Documentation

Before completing an expense report, collect all relevant information and supporting documentation. Common reimbursable expenses include travel, meals, office supplies, and professional development fees. Remote work expenses, such as internet or phone services, can also qualify.

For each expense, record the date, vendor, exact amount, and payment method. A clear business justification is also required, explaining why the expenditure was necessary. This detailed information ensures transparency and compliance with company policies and tax regulations.

Documentation, primarily original receipts or digital copies, is essential to substantiate each expense. A valid receipt includes the vendor’s name, date of purchase, itemized list of goods or services, total amount due, and evidence of payment. The IRS requires receipts for business expenses exceeding $75; it is advisable to retain documentation for all transactions. Organizing these records can streamline the reporting process.

Filling Out the Expense Report

With all expense details and documentation assembled, transfer this information onto the expense report form or into an online system. Expense reports feature fields for employee information, such as name and department, and specify the reporting period. Individual expense entries require the date, vendor, amount, and a description or business purpose.

Proper categorization of expenses is necessary for financial analysis and tax compliance. Common categories include travel, meals, and office supplies. Most systems offer predefined categories, and selecting the correct one for each expense is important. After entering the data, supporting documentation must be attached or linked to the corresponding expense entries.

Before submission, a thorough review of the completed expense report is important. This final check ensures completeness, accuracy, and adherence to company policies. Verifying all calculations are correct and every expense is properly documented helps prevent delays in the reimbursement process.

Submitting the Report

Once the expense report is completed and reviewed, formally submit it. Common submission methods include physical delivery to a manager or accounting department, or through a dedicated online portal. Some companies may also accept reports via email.

For online portals, the process involves navigating to a submission page after data entry and attachments are finalized. This often concludes with clicking a “submit” button, which may trigger a digital signature or route the report for approval. If submitting a physical report, clear instructions will specify where to deliver it. Obtain confirmation of submission, such as a confirmation email or a print screen, for personal records.

Understanding Reimbursement and Record Keeping

Following submission, expense reports undergo an approval process, which may involve review by a direct manager and then a finance department. Expenses are checked for policy compliance, accuracy, and proper documentation. This multi-tiered review helps ensure only legitimate business expenses are approved for repayment.

Once approved, reimbursement is issued through common methods, such as direct deposit or physical check. Reimbursement timelines can vary significantly between organizations, ranging from a few days to several weeks.

Maintain personal records of the submitted expense report and all supporting documentation, even after reimbursement. These records are important for tax purposes. The IRS advises retaining tax-related records for a minimum of three years, though longer periods may be prudent depending on individual circumstances.