If you have a business that frequently requires employees to purchase things for business use, you may be wondering how to document their expenses. The answer is an employee expense report form, and, most importantly, an employee expense policy. These give you insight into what your employees are spending money on and help make sure your employees get reimbursed on time.

Another easy way to manage employee spending and easily track expenses, is with a prepaid business credit card like those offered by Bento for Business. You can add funds to each card and control where, when, and how each employee uses their card. And, Bento integrates directly with major accounting softwares (like QuickBooks Online), making expense tracking for each card a piece of cake. Take Bento for a free 60 day test run and get your setup fees waived and two free cards.

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Free Employee Expense Report Form Template

We recommend that you put this form in Excel for easy calculations. You can also use Word and customize it for your small business.

ABC Company Expense Report Form

Employee Name: __________________________________________

Supervisor Name: ________________________________________________________

Expense Report Submission Date: ____________________________

Date	Description of Expense (i.e. Client Name, Item Purchased, Reason)	Location	Amount
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Reimbursement Total: _________________________________________

I certify that this report is factual and accurate to the best of my knowledge.

Employee Signature: __________________________________________

Free Employee Expense Policy Template

Below is an expense reimbursement policy that you can modify to suit your small business. You may also access this template here as a Word Document and here as a PDF.

ABC Company reimburses employees for necessary expenditures and reasonable costs incurred in the course of doing their jobs. Expenses incurred by an employee must be approved in advance by the CEO or your supervisor.

Some expenses that may warrant reimbursement include but are not limited to the following: mileage costs, air or ground transportation costs, lodging, meals for the purpose of carrying out company business, and any other reimbursable expenses as required by law. Employees are expected to make a reasonable effort to limit business expenses to economical options.

To be reimbursed:

• Expenses must be approved in advance by the CEO or your supervisor.
• Employees must submit expense reports to CEO for approval.
• The report must be accompanied by receipts or other documentation substantiating the expenses.
• Expenses must be submitted for reimbursement within 30 days of occurrence.

Expenses deemed excessive by management may not be reimbursed and may subject the employee to progressive discipline, up to and including termination.

Any falsification of expense reports will be grounds for immediate termination.

Expense reports should be submitted by the 25th of each month to be paid in the payroll that runs on the last day of the month. Any expenses between the 25th and the end of the month can be submitted the following month.

Questions regarding this policy should be directed to your supervisor.

What Needs to be Included in an Employee Expense Policy?

If you are writing your own expense policy, or if you want to customize our template, you will want to make sure to cover the following questions in your policy:

How Do Employees Get Expenses Approved?

Do your employees need to ask prior to purchasing something, or do you trust them to make the decision on their own? Or should there be a limit, such as anything over $50 needs approval? This can be a good policy if you have team members buying equipment, like painting and home repair equipment, that can rack up quite a large bill.

Who Do They Submit Expense Reports To?

Do they report expenses to you, their supervisor, HR, or your payroll provider? Who will collect expense reports? We recommended having one point of contact for your expenses in order to cause less chaos.

What Do They Need to Provide to get Reimbursed?

Aside from filling out an expense report form, what else do they need to have? Original receipts? Pictures of receipts? Dates, times, and client name/reason for expenses? This is usually the section of your expense reporting policy that needs to be as clear as possible in order to prevent issues.

What is the Time Frame for Reimbursement?

How often do you want to reimburse employees? What date should they submit expense reports by, and do the expenses ever expire? Every month or every quarter are the most common practices for reimbursement, with a timeline of submitting usually 5-10 days in advance of the payroll. If expenses are reported late, they can be reimbursed the following pay period.

What Are Approved Expenses?

While our expense policy template stays fairly vague, if you have a young workforce or if your employees travel or entertain clients frequently, you might want to be more specific about what are approved expenses. You could also establish a “per diem” or daily limit of employee spending (e.g. usually $50-100 per day for food and drinks for an employee who is traveling).

What Are Not Approved Expenses? (if necessary)

Some companies also choose to convey what are not approved expenses, which most commonly is alcohol. Some companies feel that if an employee wants a glass of wine with dinner, that should be on them; others simply set a daily limit, like we mentioned, without placing restrictions on the types of expenses.

How To Implement an Employee Expense Policy

We recommend that you have your accountant or an HR professional review your expense reporting policy before you distribute it to employees. Then, once you have finalized your policy and the accompanying form, ensure all employees get a copy of the policy and understand it (for example, have a company-wide meeting or video conference call).

If you’d like to be more thorough, have every employee sign and date a copy of the expense policy, and document this in their personnel files (electronic or paper is fine). If you have an employee handbook, the expense policy should also be added in there.

We also recommend keeping your expense form in your company’s shared hard drive, or leave copies in a designated folder that everyone has access to, for easy use.

How To Document Employee Expenses

The most common practice to document employee expenses is to use expense report forms, like our template above, that are stored in physical or electronic employee files. Alternatively, you can use expense reporting software like Expensify.

Using software like Expensify can help you to organize your reports in a more coherent way since all of the records are kept electronically and organized by employee. The employee can log in to Expensify to report expenses. For you or the admin of the account, there are automated approval and reimbursement features. Expensify also has an app for for iOS and Android, so it makes it easy for employees to upload photos of receipts and other documentation. Employees can even set reminders to submit their expenses, which saves you time from chasing them!

Whichever method you use, you should track employees’ expense levels and make sure that they are appropriate and that the business can afford it.

Top 3 Common Expense Report Problems & How To Solve Them

Money always causes problems, right? Yeah, it tends to, especially if you are the one holding the purse strings and it’s your employees who are spending the money.

Here are the top 3 expense report issues you might have and how to solve them:

Problem 1: You Think an Employee is Stealing or Falsifying Expense Reports

This is the worst situation for a small business owner. You never want to think someone on your team would steal or harm your business, but something fishy is going on and your gut tells you that you think George in Sales might be expensing a bit too much. His wife does, after all, own a restaurant… and your thoughts go down a hairy path.

Solution: First, you need to look at the evidence as a whole. Look at George’s expense report trends over his entire time at the company. If possible, have an outsider look at the pattern as well, like your accountant or an attorney or HR professional. What do they see?

If you still think the employee is stealing or falsifying reports, you need to tread carefully here. You will want air-tight documentation on what is happening, and then, you need to decide what you want to do. Is this a fireable offense? How bad is it? Should George just pay you back? What do you want to come out of this?

Then, once you know what you want to happen, you will want to confront the employee with another party present as a witness. Explain to the employee what you have found, and present copies of the records you think are false (keep the originals in your files). If you want to, you can hear the employee’s side; alternatively, you could simply terminate the employee in the same conversation. You can learn more about what you would need for termination here.

Problem 2: No One Wants to Submit the Reports (or Submit them Correctly)

This is probably the most common problem when you have an expense report policy. The Sales team is always late but wants to be reimbursed. The Marketing team forgets to include receipts. and Accounting or HR or you then goes crazy trying to figure it all out.

Solution: Stick to your guns. This is important. Make sure you clearly outline your expense policy, and reaffirm that if people do not submit their expenses in the proper way, they simply will not be reimbursed. Perhaps advise them to set a calendar reminder two days ahead of the deadline to complete their expense reports and to leave an hour to complete them.

Another workaround, is to use Bento’s prepaid credit cards. Your employees’ expense reports for their prepaid card are automatically tracked and that info can be integrated into your accounting software, either directly (QuickBooks Online) or via a CSV file. Try Bento free for 60 days and get your setup fees waived and your first two cards free.

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Problem 3: Your Managers/Long Time Employees Think They are “Above The Policy”

If your expense policy is a new addition, you might need to deal with people who feel they are above the policy, or can do things the way “they always have.” This is a common problem when you have employees who have been with your company for a long time.

Solution: Similar to problem 2, you will want to stick to your guns. Leaders should lead by example, and, again, this is not rocket science-this is simple expenses and reimbursements. If a manager or leader has a big problem with this, a little red flag should start to wave in your head that this person might not be a good long term fit for your business.

The Bottom Line

An employee expense policy and employee expense report form are fairly easy to create and implement. These will give you insight into your employees’ spending and will provide you valuable records so that you can learn, for example, if one client might cost more than they are worth. It can give you more information about your business than you might think!

If you want an easy way to both control employee spending and easily track expenses, check out Bento for Business. Their prepaid credit cards allow you to control where, when, and how much each employee spends. Plus, you can generate reports for each employee’s card in seconds and send those reports right into your accounting software, simplifying the whole process. Try Bento out free for 60 days and get your setup fees waived and first two cards free.

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