Expense Report Example

An expense report example is a useful tool that provides all the essential information regarding the daily, weekly, monthly or yearly expenses that are incurred by an organization or an individual. Being a very helpful document, it provides information about the expenses that a company incurred in its petty cash ledger or daily cash ledger during a specific time period. Similarly, if you wish to see a specific expense account, then it will show you a detailed report about this account. For instance, if a company wishes to see hiring expenses which they incurred to hire new employees, this report will highlight those expenses in a separate sheet. Moreover, an expense report is a necessary document that sets a balanced record of expenses according to the budget planned by an organization or an individual. In certain circumstances, where a business spends more on petty expense accounts than they estimate, this report can provide an exact percentage of actual expenses. Furthermore, expense reports are inevitable for better managerial controls as they are not only responsible for keeping petty cash expenses at the desired level, but also part of financial reports. It provides actual figures which are further used in the preparation of crucial financial reports.

Importance of Expense Report:

Business expansion and development is one of the toughest times for a business. During that period, a business incurs more expenses than they had planned to spend. For instance, hiring of new staff, installation of new plants and machinery, launching of new products, and opening of new offices or showrooms. Hiring of new staff is a mandatory part of business expansion as they are necessary to run a business. However, the hiring process embeds higher expenses, which a business will need to incur. So, in this scenario, preparing an employee expense report can be a means in which management can add details about how many employees are actually needed, at what managerial levels, an organization is required; for example, a manager, a waiter, a staff member, or a security guard. It is an expense report which can give an idea of how many expenses a business has incurred in the past and how much they have incurred for current hiring. An expense report can also be an alarming report, especially when a business is observing higher rates of daily or weekly expenses. As the petty cash log reports a higher percentage of expenses, management can revise their monthly budget accordingly. Similarly, if a business wants to start something new or if they decide to launch a new project, everything will happen exactly the same way as described above.

Advantages of Expense Report:

An expense report has many advantages as, firstly, it gives an exact idea about expenses. By regularly monitoring this report, a company can understand where they need to expense more and where there is no need to expense more. With the guidance of this report, an organization finds it easy to launch new projects or products as they get an estimated idea about their expenses even before they start it. As far as future planning is concerned, an expense report comes in handy to organize all arrangements well in advance. Without this report, it would be very difficult for anyone to make their next budget. Secondly, they will have no idea how much they are spending on account of petty cash expenses. An expense report, if not prepared, can cause wastage of resources, as management would not be in a position to learn how much they have spent already and how much more is necessary to spend. Similarly, they cannot make sure to expense exactly as they are allocated for each expense. For better control, it is highly crucial to learn where a business has spent more money and where they didn’t. That is the reason, an expense report can save us from many big mistakes and wrong payments.