An expense report is a document submitted by an employee or business owner detailing business expenses incurred, typically with supporting receipts, for reimbursement or recording.
Expense reports are the standard process for recording business expenses that are paid personally and need to be reimbursed by the business, or for tracking expenses incurred with company funds. A proper expense report includes: the date of each expense, a description of the business purpose, the amount, the expense category and supporting documentation (receipts, invoices). Common expenses reported include travel, meals with clients, office supplies, parking and professional development. For tax purposes, all claimed expenses must be business-related and supported by adequate documentation. Expense reports should be reviewed and approved before reimbursement to prevent fraudulent or personal claims. In Xero, expenses can be recorded through the expense claims module. SortBooks helps manage expense reporting by correctly categorising reimbursed expenses and ensuring the tax treatment is correct for each expense type.
SortBooks helps with the bookkeeping behind expense report by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing expense report by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
An expense is a cost incurred in the process of earning revenue. Expenses reduce your profit and are recorded on the profit and loss statement in the period they are incurred.
A receipt is a document confirming that a payment has been made. Businesses need receipts to support expense claims, tax deductions and audit requirements.
A tax deduction is an expense that reduces your taxable income, therefore reducing the amount of tax you owe. It must be incurred in earning your assessable income.
Internal controls are processes and procedures designed to safeguard business assets, ensure accurate financial reporting and prevent fraud or errors.
Reimbursement is the repayment to an employee or business owner for business expenses they paid from personal funds.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.