A fully itemized expense report sheet makes it easy to see what an employee paid for during a business trip, but it also creates a lot of work, both for the employee filling it out and for the manager or accountant who has to look through it and enter it into the system afterwards. On top of that, the usual need to collect receipts and bills for a paper trail can take care of a lot of the itemizing without needing a detailed sheet.
Still, if you don’t include at least some information on the expense report sheet, you’ll have to keep those receipts around forever to explain where the money went during a business trip. That’s why you have to be careful which categories you put in and which ones you leave out.
1. Don’t Include Expenses You Won’t Cover
A Canadian employer can cover or not cover any and all of its employee travel expenses, and the laws are similar in other nations. If you aren’t going to compensate an employee for certain costs, then don’t bother keeping track of them. The employees still might because they can get a tax deduction depending on what they are, but that’s their responsibility.
2. Put Yourself In An Auditor’s Shoes
Once you pay off an employee’s travel bill, that’s the end of things as far as the accounting goes, but you still need the expense report sheet for tax purposes. As such, you should ask yourself how much detail an auditor might want in case someone decides to take a closer look at your returns.
To get a full 50 percent deduction on food, lodging, and entertainment costs, they need to be “reasonable.” So if a travelling representative eats fast food most days but hosts a client at a fancy restaurant during negotiations, those are reasonable expenses, but if you only have a space for “food” it might just look like the employee wanted to treat him or herself on the company dime. Adding separate categories for individual meals and entertainment would help clear things up, and it helps employers watch for patterns in employee spending.
A good expense report sheet should be easy to read but detailed enough to see what an employee did on the trip without having to dig through the receipts. It should also make use of as much of the sheet or screen as possible, because sheets are easier to read when the information isn’t scrunched up in one corner.