How to create an employee expense report that keeps finance happy
Lost receipts, late claims and “accidental” upgrades – solved.
Source: Pexels
{Alt text: An overhead shot of an employee going through messy paperwork and receipts.}
Expense reports are the form nobody loves. For employees, they’re a chore – digging through old emails for digital receipts or tipping a shoebox of crumpled paper onto the desk at month-end. For finance teams, they’re a test of patience: late submissions, vague explanations (“miscellaneous”) or the occasional attempt to slip in a lobster dinner under “client meeting”.
And yet, expense reports are so important. They’re how companies keep travel spend under control, stay compliant with tax rules and make sure employees aren’t left out of pocket for weeks after a work trip. Without them, the books don’t balance, audits get messy and budgets become educated guesses.
On the flip side, when expenses aren’t logged properly – your employees miss out too. In fact, a study of 2,000 employed adults published last year found 22% have not claimed some costs back from their employer since August 2023. And nothing breeds quiet resentment faster than staff feeling they’ve had to cover company costs out of their own pocket.
Below, we’re breaking down how expense reports should work, why they so often frustrate and how to build a process that respects both employee time and company budgets.
Table of Content
- What is an employee expense report? 2
- Why expense reports matter more than you think 3
- The pain points employees face 3
- What should an employee expense report include? 4
- Common pitfalls with an employee expense report 6
- How to create a foolproof employee expense report 7
- Tools & tech that make expense reporting easier 8
- Best practices for the everyone involved 9
- Employee expense report template 10
- Final thoughts 11
What is an employee expense report?
At its core, an employee expense report is just a record of money spent on behalf of the business. Consider it as the bridge between the employee who’s paid out of pocket and the finance team responsible for balancing the books.
It usually includes the essentials: who made the claim, when and where it was spent, what it was for, how much it cost and proof in the form of receipts. In plain terms: I spent £X on Y for Z reason – please reimburse me.
Expense reports exist for three main reasons:
- Accountability: to make sure company money is used responsibly.
- Compliance: to keep everything audit-ready and tax-compliant.
- Fairness: to ensure employees aren’t left footing the bill for legitimate business costs.
Without them, expense claims turn into an informal, unpredictable process – and that’s where frustration starts to creep in.
Why expense reports matter more than you think
On the surface, an expense report looks like paperwork. But behind the scenes, it’s a key lever for financial control. Reports give companies visibility on how money is being spent day to day – from travel to client entertainment – and that visibility translates into better forecasting, fewer surprises and smoother audits.
They also protect against small leaks that scale quickly. Take a simple taxi ride: if one £100 trip goes unreported, it’s frustrating but manageable. If 1,000 employees do the same over the course of a year, that’s £100,000 quietly disappearing from the balance sheet.
And it’s not just small leaks, though. Expense fraud is a real risk, particularly across the pond. An American study by the Association of Certified Fraud Examiners (ACFE) found that organisations lose around 5% of revenue to expense fraud every year, with a median loss of $145,000 per incident. The longer it goes unnoticed, the more damaging it becomes.
In other words: expense reports aren’t just about paying people back. They’re about keeping cash flow predictable, guaranteeing compliance with tax authorities and helping leaders understand where budgets are actually going.
The pain points employees face
Source: Pexels
{Alt text: A woman looking at an employee expense report with a confused expression.}
Of course, none of that changes the fact that employees often dread the process. Submitting an expense report can feel like a part-time job:
- Receipts get lost in taxis or left in hotel bins.
- Clunky software means hours of manual data entry.
- Reimbursements can take weeks, leaving employees out of pocket long after the trip is over.
Imagine paying £500 upfront for a hotel on your personal card, only to wait six weeks for the reimbursement to land. It is not an edge case either – a 2025 survey of 2,000 UK employees found that 43% had experienced genuine financial difficulty while waiting to be reimbursed. For the employee, that’s more than an inconvenience; it’s a serious strain. For finance, it’s a reputational issue: a company that can’t pay people back quickly undermines trust.
That’s why designing an expense reporting process that is clear, fair and fast is crucial. It’s not just a case of compliance or cash flow. It’s about respect for the people who are doing their jobs – often while travelling, juggling clients or working long hours away from home.
What should an employee expense report include?</h1
Done right, an expense report is a complete story of who spent what, why, and how it fits into company rules. Here’s what a solid report should cover.
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Employee details
Start with the basics: name, department, role, and the manager who will sign off. It sounds obvious, but without it finance has to play detective when reconciling.
✗ “Submitted by: J. Smith.” (Which J. Smith? The company has three.) ✔ “Submitted by: Jane Smith, Marketing Department, approved by Alex Turner (Head of Marketing).” |
Clarity here saves time later and avoids awkward email chains asking “whose lunch is this?”
Receipts and proof
Receipts are the lifeblood of expense reports. Without them, finance has no way to verify spend and reimbursements slow down.
✗ “Dinner with client – £120. No receipt, but I promise it happened”. ✔ “Dinner with client – £120, The Ivy, 10th March. Digital receipt attached”. |
Encourage digital copies wherever possible: photos, PDFs or emailed invoices. They’re harder to lose and easier to store. If receipts really are missing, a short note explaining why (e.g., machine broke, receipt emailed late) is far better than leaving finance guessing.
Business purpose
Every expense should come with a “why”. Without it, auditors can’t distinguish between a genuine business cost and a personal splurge.
✗ “Lunch, £45”. ✔ “Lunch with client X to discuss renewal contract – £45”. |
That one extra line transforms an opaque claim into a defensible record.
Categories of expenses
Travel
Meals & entertainment
Office & project costs
Policy alignment
Every report should demonstrate that claims fall inside company rules. That doesn’t mean employees never make mistakes, but when they do, it’s easy to spot.
✗ “Amazon order – £120 (noise-cancelling headphones)”. ✔ “Office equipment, £120 – laptop stand + keyboard. Approved under IT budget”. |
Building policy reminders directly into your reporting tool helps nudge employees. For example: if alcohol isn’t covered, the system flags a drinks receipt automatically.
The bottom line: An expense report should read like a short story with receipts: who, what, when, where and why. The difference between a vague claim and a complete one is the difference between finance signing off quickly and weeks of back-and-forth.0
Common pitfalls with an employee expense report
Even with the best intentions, expense reports often go wrong in predictable ways. Here are five of the biggest offenders:Late submissions
Late reports are the bane of finance teams. When an employee files their January trip in June, it throws off cash flow, forces reconciliations to be redone, and leaves staff carrying hundreds or even thousands of pounds on their personal cards for months. It’s not unusual to see something like: “Trip: January. Expense report submitted: June. Amount: £3,400”. By that point, budgets have closed and patience has worn thin.
Vagueness
Auditors don’t accept “miscellaneous” as a business reason – and neither should managers. Yet vague claims still creep in. A classic example? “Claim: £48 – Reason: sustenance. Receipt: none”. That line might make sense to the person submitting it, but to anyone reviewing it, it’s meaningless. Contrast that with a clear note like: “Dinner with client X, 14 Feb, £48. Digital receipt attached”. One is defensible; the other just invites questions.
Forgetfulness
Receipts are the proof that make expense reports work. Without them, finance is left chasing employees or rejecting claims outright. The excuses are endless: “Lost receipt, but you can trust me” being the most common. Trust is important, but it’s not an audit trail. The simplest fix is cultural – normalising snapping a quick photo of the receipt at point of purchase so it doesn’t end up lost in a taxi or buried at the bottom of a bag.
Over-claiming
Over-claiming is often framed as accidental, but it erodes trust either way. It can range from flight upgrades that were never approved to slipping in personal subscriptions under “office supplies”. One infamous example: “Expense type: Taxi. Amount: £250. From: Ibiza airport. During: Annual leave”. That’s less a legitimate business expense and more a holiday souvenir, and finance teams are right to push back.
Outdated methods
Finally, some of the worst mistakes aren’t about the claims themselves but the way they’re submitted. Paper forms, manual spreadsheets, even faxed reports still circulate in some organisations, slowing everything down and making errors inevitable. Imagine an expense report arriving by fax, twelve pages long and half illegible. In 2025, employees expect digital tools that make reporting faster, cleaner and easier to audit.
How to create a foolproof employee expense report
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{Alt text: A calculator, laptop, pencil and notepad neatly positioned on a desk.}
1. Start with a clear template
Structure is everything. A well-designed template acts as a roadmap, guiding employees through the information finance needs. At minimum, it should include: employee name and department, dates of the expense, type of expense, amount and currency, business purpose, receipts and manager approval. Explain who spent what, when, where and why. Without those fields, finance ends up chasing missing details, which slows everything down.
2. Record expenses in real time
The biggest enemy of accurate reporting? Waiting until the end of the month. Receipts go missing, details blur and employees end up guessing. Recording expenses in real time fixes that. Most modern apps let you snap a photo of a receipt the moment you get it, or even pull digital invoices straight from your inbox. Five seconds now saves hours later – and avoids the classic shoebox-of-receipts scenario.
3. Be specific about the business purpose
Vague explanations are where expense reports fall apart. “Client lunch” tells finance nothing. A clear purpose proves the expense was legitimate and helps with audits. For example, instead of “Client lunch”, write “Lunch with Client X to discuss renewal project (14 Feb)”. That one line transforms an ambiguous claim into a defensible, useful record. It also gives managers context for future budgeting – spotting whether money is going into client relationships, training or travel.
4. Categorise correctly
Categories aren’t just admin. They help finance allocate spend to the right budget lines and spot trends over time. If travel costs are creeping up or client entertainment is swallowing more than expected, categories make it visible. Always match expenses to the category that best reflects the spend: travel, meals, office supplies, client entertainment and so on. Mis-categorisation might not feel like a big deal to the employee, but across hundreds of reports it skews budgets and makes analysis meaningless.
5. Double-check before submitting
A five-minute review can save weeks of back-and-forth. Before hitting submit, scan through: Are all receipts attached? Are amounts correct? Have you converted currencies properly? Does each expense have a clear business purpose? It’s worth the pause. Nothing frustrates finance more than having to reject a report for something avoidable, like a missing attachment or a typo in the amount.
6. Submit promptly
Timing matters as much as accuracy. The longer employees wait, the more difficult it becomes for finance to reconcile budgets and for employees to get reimbursed quickly. Submitting promptly – ideally within a week of the expense – keeps cash flow predictable and prevents backlogs. It also signals respect: finance can close their books cleanly, and employees aren’t left out of pocket for weeks.
Tools & tech that make expense reporting easier
The days of stapling paper receipts to a form are (thankfully) behind us. And good riddance: manual sorting, verifying and coding takes an average of eight minutes per receipt. Multiply that across a team and it’s no wonder finance teams are crying out for automation.
Below are a few ways technology takes the edge off.
Expense management apps
Apps like Expensify, Concur and Pleo have made “snap and go” the new normal. Instead of hoarding receipts until the end of the month, employees can photograph them instantly. Many apps read the receipt automatically, fill in the date and amount and categorise the expense with minimal input. For finance, that means fewer typos, fewer missing fields and a much smoother approval process. Mobile-first design is essential in this day and age. If someone can submit expenses from an airport lounge in two minutes, they’re far less likely to forget later.
Corporate cards & allowances
One way to take the sting out of expenses is to remove the out-of-pocket element altogether. Corporate cards or pre-loaded allowances mean employees aren’t stuck covering business costs with their personal money. Some cards integrate directly with expense tools, pulling transactions into reports automatically and matching them to receipts. It’s faster for employees and gives finance near real-time visibility of spend. Of course, cards still need clear guardrails, but they can cut down dramatically on reimbursement delays.
Integrations
The real power of expense tools comes when they connect to the rest of the business. Integrations with payroll and accounting software mean expenses flow straight into financial records without double entry. Linking tools to booking systems can also cut down on manual claims – for example, when flights or hotels booked through an approved platform feed directly into expense reports. The fewer steps involved, the less admin there is to trip people up.
Roomex
Tools like Roomex go a step further by combining travel booking and expense management in one place. Instead of employees paying upfront and filing later, bookings are consolidated, receipts are automated and finance gets clear reporting without chasing. It’s the kind of integration that turns expense reporting from a dreaded task into a process that happens almost invisibly in the background.
Best practices for the everyone involved
Expense reports run smoother when everyone plays their part. Here’s what works best for each group
Source: Pexels
{Alt text: A group of people having a meeting in an office, all smiling.}
For employees
Snap receipts straight away – digital copies save time and don’t get lost in taxis or bins.
Add clear business purposes – “Taxi from client office to station” beats “Travel.”
Use the right categories – it helps finance track spend and avoid messy reallocations.
Check before you submit – missing receipts and typos cause avoidable delays.
File on time – aim to submit within a week of the expense.
For managers
Approve quickly – holding up approvals slows reimbursements and frustrates staff.
Set realistic expectations – a £10 meal cap in central London isn’t practical.
Give context – explain why limits exist (e.g., average hotel rates in your cities).Trust your team – don’t micromanage every taxi; focus on exceptions, not everyday spend.
Lead by example – follow the same rules you ask others to.
For finance teams
Keep policies clear and human – avoid jargon that confuses more than it helps.
Close the loop – give feedback when claims are rejected so employees learn for next time.
Review regularly – update caps and categories to match inflation and travel trends.
Spot patterns early – use reporting to see if costs creep up in certain areas.
Invest in tools – the right tech reduces admin and makes compliance almost automatic.
Employee expense report template
The template below covers the basics: who’s claiming, what was spent, why it was spent and how it lines up with company policy. Note:- Smaller teams may only need a few fields; larger organisations might add cost codes, project IDs or multiple approval levels.
Employee Expense Report
Employee details
Department: _____________________
Manager: ________________________
Expense details
Date: ___________________________
Expense type/category: ___________
Amount: £__________ Currency: ______
Business purpose: ________________
Receipts
Attached digital copy? Yes / No
Totals
Subtotal: £__________
Taxes (if applicable): £__________
Grand total: £__________
Approvals
Manager’s name: __________________
Approval signature/date: __________ |
Remember, this isn’t a finished product. If your company reimburses mileage, add a mileage log. If client entertainment is common, create a section just for meals. Tweak and adapt as needed.
Final thoughts
Expense reports don’t have to be the chore they’re known for. With the right structure, a little clarity, and a few good habits, the whole process becomes far less painful. Employees get reimbursed quickly, finance gets clean data and managers spend less time chasing the grey areas that cause friction.
The key is simplicity. A clear template, receipts captured in real time, and a straightforward approval process go further than layers of rules or jargon ever could. Build a system people can actually use, and you’ll see fewer delays, fewer disputes and more trust across the board.
Technology helps too. Modern tools take care of the admin automatically – snapping receipts, categorising expenses and feeding everything into finance systems without manual work. Platforms like Roomex make this even easier by linking bookings and expenses in one place. Instead of employees paying upfront and filing later, costs are logged automatically, giving finance instant visibility and employees one less job to do.
Done right, expense reports stop being paperwork for paperwork’s sake. They become a smooth, reliable process that supports employees and gives companies the insight they need to manage budgets well. Everyone wins.
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