Whether you have a small company or a big multinational organization, the key to a successful business is record keeping. We are not talking about keeping the record of employees’ performance, sales graph, effectiveness or marketing strategies but there is another very important element; expenses. When a business keeps record of its expenses, the owners or higher management can easily evaluate if the money is serving the right purpose or if it’s going to waste. This makes it more crucial for companies and organizations to prepare and keep expense reports. On micro level, these expense reports will include each and every transaction or expense but on a macro level, this is a report that tracks expenditures of employees.
Uses and Importance of Expense Reports:
Companies work under government rules and regulations and one of those rules state that if an employee is spending money on behalf of company for the betterment of company, he has to be reimbursed. For instance, your employees are allowed to take their clients on lunch meetings and close the deals in their client’s favorite restaurant or you ask your employees to take part in seminars in another city. In these and many other cases, company employees spend their personal money and they have the legal right to get it back from the company. In order to get the money they spent back, they need fill the office expense forms. These forms include the details of expenditure for financial purposes. Once an employee is reimbursed for office expense, the detail goes on the expense reports.
Another situation is when a company spends money on office stationary or furniture and the purchase department gets approval of the purchase from the executive board. Once the purchase is completed and money is transferred in return of office goods i.e. a photocopier machine or new chairs or raw material for production, the details go on expense reports. You can assume that an expense report keeps record of all the money spent for development of business.
Expense Report Templates – MS Word
Here are 9 Free Expense Report Templates in MS Word format for your kind assistance.
Download link for this MS Word Expense Report Template 01,
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Download link for this MS Word Expense Report Template 04,
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The most important purpose of keeping an expense report is to check if company is spending money in the right manner. Before any major purchase is approved, the financial department will take a look at the expense report and ensures that they approve what is absolute necessary. If budget is low, maybe employees need to wait a little longer before they get new computers or if the budget allocated for marketing purposes last quarter didn’t result in any increase in the sales, maybe it’s time to invest in a different advertising technique. Another important benefit of expense reports is to track the expenses made by each individual employee. Employees working in different departments have separate limits to spend company money and with the expense reports, whatever they spend is recorded and it’s analyzed later to check if an employee has spend more money than other employees.
Expense Report Templates – MS Excel
Here are Free Expense Report Templates in MS Excel format for your kind assistance.
Download link for this MS Excel Expense Report Template 01,
Download link for this MS Excel Expense Report Template 02,
Download link for this MS Excel Expense Report Template 03,
Download link for this MS Excel Expense Report Template 04,
Download link for this MS Excel Expense Report Template 05,
Market Practices of Expense Reports:
It solely depends on the type of business that what kind of expense report format you need. For instance an IT firm will use a specific type of expense report format which will be completely different from the expense report format that a garment factory is using. You can see various different examples of expense reports online and check if any of them suits your requirements but it would be better if you can understand the key elements from available examples and create your own expense report.
An important market practice about expense reports is to give certain codes to regular expenses. For instance, you acknowledge your sales staff to take their clients out for meals and close the deals in a restaurant or a fast food joint. This means that this expense will occur more often and because an expense report is kept precise and short, there is no purpose of writing reimbursement for meal with client every time on the report but you can just write a specific code. This code will indicate the expense made because each expense will have an individual code.
Keeping the record of what the company and its employees are spending is important and so is the effectiveness of each expense. Smart businesses understand that in order to stop wasting company resources, it’s important to act fast so they prepare monthly expense reports. At the start of each month, a committee sits together and evaluates the expense report from previous month. They discuss if an expense wasn’t necessary or if one particular employee could take the client to a less expensive restaurant or if for a business meeting in another city, a different employee should be sent because his family is in that city and he could be allowed to take 1-2 days off and have a long weekend so the company didn’t have to reimburse for his travel charges.