Expense reports document business costs—like travel expenses or office supplies—paid for by employees. They provide the company with the details needed to review purchases and reimburse the employees who paid for them.
Although necessary, processing expense reports can be time-consuming. In a 2024 survey of more than 200 US finance leaders, nearly half said excessive time spent on expense reports was a major issue.
A process makes reporting easier for employees and finance teams. This guide explains what an expense report includes, how to create one, and how approval and reimbursement work.
What is an expense report?
An expense report is a document that records business purchases an employee makes. IRS recordkeeping guidance requires these details for every business expense:
- Payee (merchant or vendor)
- Amount paid
- Proof of payment (such as receipt or invoice)
- Date incurred
- Description of item or service purchased
Companies may also choose to track:
- Employee name
- Expense category
- Payment method
- Business reason for purchase
Employees can submit an expense report after spending on an activity such as a business trip, client lunch, or office errand. The report gives the company the details it needs to review expenses and reimburse out-of-pocket costs.
Types of expense reports
Expense reports can cover a single trip or cost, or a series of expenses over a set reporting period. There are a few types of expense reports, varied by company review and repayment procedures. Businesses can also use expense reports to reconcile petty cash purchases made from a shared cash fund.
Travel expense reports
A travel expense report records costs from a work trip. The IRS defines business travel expenses as ordinary and necessary costs incurred while traveling away from a tax home for work. Costs may include airfare, lodging, local transportation, and eligible meals.
A travel expense report typically includes trip dates, destination, and business purpose. Employees typically keep receipts to document reimbursable expenses.
Mileage expense reports
A mileage expense report tracks business use of a personal vehicle. Entries record travel date and miles driven. It also explains routes and business purposes.
Employers may reimburse drivers using actual vehicle costs or the IRS standard mileage rate. The IRS updates this rate over time. Claimants can record parking and tolls separately when company policy allows.
Per diem expense reports
A per diem expense report uses a daily allowance for work travel. One allowance covers lodging, and another covers meals and incidental expenses. Employees record the trip dates, destination, and business purpose of each expense. They then claim the approved amount for eligible travel days.
The IRS’s standard meal allowance varies by destination. Federal agencies use US General Services Administration (GSA) rates. Under GSA’s fiscal year 2026 bulletin, the standard lodging rate for the continental US is $110. Meal and incidental expense rates range from $68 to $92.
Monthly and yearly expense reports
A monthly expense report covers purchases made during a single month. Employees record each transaction and attach the receipt. The company reviews the report and repays the employee on a regular schedule.
Yearly expense reports give the company a review of those monthly records combined. It summarizes the spending across the full year for financial reporting and budgeting.
The company’s accounting method determines when an expense enters the books. Accrual accounting records it when the cost is incurred, and cash basis accounting records it when payment is made.
Why are expense reports important?
Expense reports give employees a way to request reimbursement and give business owners a record of company spending. Business travel alone generates substantial costs: a 2025 Global Business Travel Association survey of more than 7,300 business travelers, average spending reached $1,128 per trip.
They help document tax deductions
Many ordinary and necessary business expenses are tax-deductible. A deduction reduces taxable income.
Expense reports keep eligible costs and receipts together, so the business and its accountant have a record at tax time. Keep non-deductible expenses on the report as well. The business still needs a complete record of the purchase, even when it cannot claim the cost on its tax return.
For more details on deductible costs, see IRS Publication 535.
They track expenses
Expense reports show how much the business spends and why each purchase was made. Owners can compare these costs with their small business budget and use the categorized totals in profit and loss statements.
Regular expense reviews are among the accounting tips that help owners keep financial records current. In Shopify’s Q4 2025 Survey of Store Owners, 69% of store owners said they reviewed their finances at least weekly. Expense reports also provide source documents for bookkeeping.
They help deter expense fraud
Detailed reports make expense claims easier to review. A receipt confirms what the employee purchased.
The business purpose explains how the cost relates to work, so managers can check both against company policy before approving reimbursement. Reviewing claims before payment is one of several accounting best practices used to maintain internal controls.
The Association of Certified Fraud Examiners’ 2026 report estimates that organizations lose 5% of revenue to fraud each year. The median loss was $104,000 per case, but the average was nearly $1.5 million. Small businesses experienced the highest median loss of any organization size. The report covers occupational fraud across many schemes.
Expense records let businesses review employee spending and identify questionable claims.
What to include in an expense report
Every company has different requirements for expense reports, but a few fields deserve more explanation: the employee submitting the report, how to describe each purchase, and what documentation to attach.
Businesses may use multiple documents to record every detail.
Employee details
An expense report should name the person submitting it. Include a work email so the reviewer can follow up with questions.
Companies may also request an employee ID, job title, or department to direct the report to the proper approver. The report may also record the employee’s preferred reimbursement method.
Purchase description
Describe each purchase in a few words. The reviewer should be able to match the line item to its receipt.
Every line item should also state its business purpose. For example, “Welcome dinner for six clients” explains the expense more clearly than “Dinner.”
Receipts
Attach relevant receipts or invoices to the report. They provide proof of purchase and help the reviewer verify the amount paid.
IRS Publication 463 generally requires documentary evidence for travel and transportation costs. It cites three exceptions:
- Travel meals or lodging reported under an accountable plan that uses a per diem allowance
- An expense under $75, other than lodging
- A transportation expense when a receipt isn’t readily available
A company might still ask for a receipt in these cases.
Expense report template
An expense report template can explain how employees submit documentation. It can also set naming rules, such as the employee’s last name plus the month and year.
This free expense report template downloads as a Microsoft Excel (.xlsx) spreadsheet. The template works for weekly or monthly reports. Employees can also use it to record travel expenses.
Built-in formulas calculate the total as expenses are added. Small business owners can use that amount to review the claim and reimburse the employee.
The completed example below shows three expenses from one business trip. Each row records the purchase date and business purpose. The total updates automatically to show how much the employee is owed.
How to make an expense report
A consistent, step-by-step process makes filling out an expense report easier and faster. Use a company template or the free template above, and follow these four steps:
1. Gather your receipts
Take a photo of each paper receipt when purchasing a business product or service. Save email receipts to a dedicated folder.
Before submitting the report, combine the files into one PDF and arrange the pages in the same order as the line items. For monthly reports, keep each month’s receipts in a separate folder.
2. Customize your template
Add your name and contact details. Include your team name, if required.
3. List your expenses
Create one line item for each receipt. Record the merchant or vendor name, purchase date, and amount, and add a short description. Include a business purpose and expense category, if required.
Common categories include:
- Travel
- Meals
- Lodging
- Transportation
- Mileage
- Office supplies
Use the same category names in your company’s chart of accounts, which makes it easier to post each approved expense in general ledger accounting. If you pay fees on an international shipment, record duties and import taxes separately from the goods.
Microsoft Excel and Google Sheets can sort the entries by date. Use a SUM formula, such as =SUM(D2:D20), to calculate the total in the Amount column.
4. Submit your expense report
Compare your report with the receipts, and correct any errors. Then, export the report as a PDF and name it according to company naming conventions, for example: “[Your name] Expense Report [Month] [Year].”
If your company reimburses expenses through payroll accounting, they should record it separately from payroll deductions, which are amounts withheld from your paycheck, not money owed back to you.
Attach the receipt PDF and send both files to the designated approver. Team templates should state the submission schedule, identify the approver, and list the required expense categories.
Expense report software and automation
Templates work for occasional claims with one approver. When a company processes frequent claims or uses multistep approvals, automated accounting tools can capture receipt data and route each claim to the correct reviewer.
Businesses that also need bookkeeping or financial reporting can compare small business accounting tools with expense-management features. Shopify stores with billing access can create expense reports for past Shopify bills from Settings > Billing in the Shopify admin.
AI expense-reporting tools include:
- Expensify. Concierge AI categorizes transactions and prepares expense reports. It can also flag claims that conflict with company policy.
- SAP Concur. AI-powered receipt capture creates expense entries. Other tools review reports and route them for approval.
Expense report FAQ
How do you make a simple expense report?
A simple expense report needs four things per purchase: the date, the merchant, the amount, and the business purpose. Attach the receipt, total the amounts, and submit for approval. Skip extra fields like employee codes or multiple approvers unless your company requires them.
Who fills out an expense report?
Employees generally complete their own expense reports because they have the receipts and know the reason for each purchase. A manager checks the expenses against company policy and approves the claim.
Self-employed people can use them toseparate business and personal expenses by documenting costs paid from their own funds.
Can I automate expense reporting?
Expense software can read a receipt and create the matching expense entry. Then, it assigns a category, checks the purchase against company policy, and sends the report to the correct approver.
What does an expense report look like?
Most expense reports place the employee’s details and reporting period at the top, followed by a table of purchases. Each row identifies the merchant and purchase date. A short description explains the business purpose, and the final column shows the amount. The report ends with the total owed to the employee.
Can you use a spreadsheet for expense reports?
A spreadsheet works well when a business handles a few claims each month through one approver. In Microsoft Excel or Google Sheets, each row can hold one purchase, and a SUM formula can calculate the reimbursement total.
