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Expense Management

Expense Reports: Ultimate Guide For Small Business Owners

26 September 2023
Grof Writer
5 Minutes Read
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When it comes to financial management, it is always vital to know when, how, and where you spend your money. So, to build a functioning organization, one must understand cash flows because they are a great indicator of the direction that the company is heading. Good expense reports provide small business owners with a clear picture of their business finances at all times. 


This article delves into details on what makes a good expense report, including a guide to creating and reviewing one for your business. 

 

What Are Expense Reports? 

Imagine a scenario where an employee needs to make a purchase during a work trip but can't reach the home office for approval. In such cases, employees often end up using their own money for extra business expenses. These costs can include travel expenses, meals, office supplies, and even technology items. Therefore, it is always important to have expense reports prepared and reimburse employees fairly.  


The main goal of an expense report is to monitor a company's spending. While expenses vary, businesses typically have guidelines for valid business expenses, and employees know what they can claim. As a small business owner, if expenses exceed a set limit, you can ask for receipts along with the expense form. Once you receive the report, review it to ensure the accuracy and approval of all figures. Most businesses generate expense reports monthly, quarterly, or annually. 

 

Contents Included In Expense Reports 

When drafting an expense report template, you need to include the following things; 

  • The employee's details (name, department, role, contact information, etc.)  
  • Expense date and amount (matching the receipt) 
  • Expense type (meals, mileage, internet, etc.) 
  • Merchant or vendor name Associated client or project (if relevant) 
  • Account for expense from the company's chart of accounts 
  • Extra notes for each expense 
  • Subtotal for each expense type and total cost with tax 
  • Deduction for any previous advances given to the employee (if relevant) 

 

Importance Of Expense Reports 

So, why are expense reports important? The initial value of an expense report is that it allows employees to get a reimbursement. With the report, expenses can be reimbursed to transfer responsibility for bills to deserving parties. 


For small business owners, expense reports are very important for several reasons. 


Financial Visibility 

Expense reports give a thorough insight into all the costs associated with running a company. Owners may discover places where expenses can be reduced and understand where money is being spent thanks to this visibility. 


Budgeting And Planning 

Business owners may create reasonable budgets and make wise financial decisions by using precise spending reports. They can alter their spending to comply with corporate objectives by evaluating actual expenditures versus budgets.  


Tax Compliance 

During the tax season, expenditure reports serve as essential proof of deductible spending, which can reduce tax obligations. 

 

Automated Expense Management Tool 

There are a couple of reasons why you need to switch to an automated expense management application, and these reasons are; 


It's time-saving and cost-efficient 

With Grof’s business account, users can effortlessly upload receipt screenshots, set the expense category and request bill approval from the designated approver. This streamlines the process, eliminating the need for manual entries and numerous email exchanges, thus saving both time and effort.  


Improves transparency and visibility 

Consolidated expense data helps identify patterns, increase efficiency, and discover cost-saving opportunities and areas for development. Utilising the real-time expense tracking feature, you can access the most up-to-date inflow and outflow transactions of the company, complete with detailed information. Accountants can conveniently export statements for making informed decisions regarding future financial planning. 


Improved expense fraud 

Manual expense reporting, weak spreadsheet security, and duplicate submissions can raise costs and reimbursement risks. Our cloud-based business account safeguards data, ensures error-free exports, and provides comprehensive insights, reducing the need for redundant entries across platforms. 


Better security 

While spreadsheets offer password protection and locked cells, they can still be altered, creating vulnerabilities in data security and storage. On the other hand, our business account addresses this issue with advanced security measures. Our transaction approval processes incorporate two-factor authentication, effectively deterring any potential misuse of funds for unspecified activities. 

 

Reach Out To Grof For Assistance With Your Expense Reports 

Expense management reports are critical, and if you need to get started with reports for your business, we're here to help. Here at Grof, we offer a complimentary expense management solution for business owners like you. Over the years, our experts in Singapore have helped business owners such as yourself set up their companies and manage their expenses, among other requirements. 


If you need to streamline your expenses and other financial reports, we can guarantee a smooth transition for your company. We can also help ensure that you remain tax compliant with the local regulations to support your business's growth. 


If you are ready to get started, so are we. 

 

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Explore crucial dos and don'ts, along with essential tips for a successful company registration when establishing your foothold in Singapore!
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