How to Do an Expense Report (Step by Step)

To do an expense report, list every business expense with its date, amount, vendor, category, and business purpose, attach a receipt to each line, total the columns, and submit it for approval or reimbursement. Most people build it in a spreadsheet or a template, then keep the receipts as proof. Here is the full process, the receipt rules the IRS actually enforces, and a faster way to fill one in.

What is an expense report?

An expense report is an itemized record of business costs that someone paid out of pocket or on a company card, submitted so the expenses can be reimbursed or deducted on a tax return. Each line shows what was bought, when, how much, and why it counts as business. Employees use one to get paid back; owners and the self-employed use one to total deductible spending before they file.

What an expense report should include

A complete report has one row per expense and a few standard columns. At a minimum, include:

• Date the expense was paid
• Vendor or merchant name
• Category (travel, meals, supplies, software, mileage, and so on)
• Amount, plus the sales tax if you track it separately
• Business purpose, a short note on why the cost was necessary
• Payment method (personal card, company card, cash)
• Receipt attached or referenced for the line

For travel and meals the IRS wants more than a number. Under the substantiation rules in IRS Publication 463, an adequate record shows the amount, the time, the place, and the business purpose, and for a meal it also shows the business relationship of the people present. Those five elements are what turn a receipt into a defensible deduction.

How to do an expense report step by step

1. Gather every receipt for the period. Pull together the paper slips, emailed confirmations, and card statements that cover the trip, the month, or the quarter you are reporting.
2. Pick a format. A spreadsheet template is fine for most people. Use a fixed set of columns so the layout never changes from one report to the next.
3. Enter one line per expense. Record the date, vendor, amount, category, and a one-line business purpose for each receipt.
4. Categorize as you go. Group costs the way your accountant or tax form expects so totals drop straight into the books at the end.
5. Attach the receipts. Keep a legible image of each receipt with the report, named or numbered so a reviewer can match it to the matching line.
6. Total each category and the report. Sum the columns, then the grand total, and note any amount that was an advance to be settled.
7. Submit for approval or filing. Send it to whoever approves reimbursements, or file it with your tax records if you are reporting your own spending.

If the receipts are already digital, you can skip most of the typing. A tool that reads each receipt and writes the vendor, date, total, and tax into rows lets you scan a batch of receipts for expenses and start the report with the data already entered.

What receipts are required for an expense report?

You need a receipt for any single expense of $75 or more, and for any lodging cost no matter the amount. That $75 threshold comes from the IRS substantiation rules in Treasury Regulation 1.274-5; it has stood at $75 since 1995 and is not adjusted for inflation. Below $75 and not lodging, a receipt is not strictly required, but you still have to substantiate the expense with a record showing the amount, date, place, and business purpose.

Company policy is often stricter than the tax rule. Many employers ask for a receipt on every line regardless of the dollar amount, because it is simpler to enforce one rule than two. When in doubt, keep the receipt.

Does the IRS accept scanned or photographed receipts?

Yes. Under Revenue Procedure 97-22, the IRS accepts electronic and scanned records as long as they stay accurate, legible, and retrievable, and your system is organized enough to pull a specific receipt on request. You can photograph a receipt and discard the paper once you have a clear copy. This matters for expense reports because thermal receipts from gas stations and restaurants fade within months, so a digital copy is often more reliable than the original. There is more detail in our guide on whether the IRS accepts digital receipts.

Can you do an expense report in Excel?

Yes, Excel or Google Sheets handles an expense report well for most individuals and small teams. Set up a header row with date, vendor, category, amount, tax, business purpose, and payment method, then add one row per expense and use SUM to total the columns. The limit is data entry: someone still has to type every line from the paper. To remove that step you can convert your receipts to an Excel spreadsheet first, then sort and total the rows. If your books live in QuickBooks, you can also import the receipt data into QuickBooks instead of keying it.

What is an accountable plan, and the 60 and 120 day rule?

An accountable plan is the IRS framework that lets a company reimburse employee expenses without treating the money as taxable wages. Under Treasury Regulation 1.62-2 it has three requirements: the expense must have a business connection, the employee must substantiate it with records, and the employee must return any excess advance. Miss any one and the whole reimbursement becomes taxable W-2 income.

The regulation includes a safe harbor for timing: expenses are treated as substantiated within a reasonable period if the employee reports them within 60 days of paying, and returns any unspent advance within 120 days. Submitting reports promptly is what keeps reimbursements tax free, so most expense policies set a deadline well inside those windows.

How does per diem work on an expense report?

Per diem replaces itemized meal and lodging receipts with a flat daily allowance, which simplifies travel reports. The federal standard rate set by the GSA for fiscal year 2026 is $178 a day, made up of $110 for lodging and $68 for meals and incidentals, effective October 1, 2025 through September 30, 2026. Rates run higher in expensive cities, so check the GSA per diem lookup for the specific location. When you reimburse at or below the federal rate under an accountable plan, employees usually do not need to keep meal receipts, though they still log the time, place, and business purpose of the travel.

Are business meals fully deductible on an expense report?

Business meals are 50% deductible in 2026 when you or an employee is present, the food is not lavish, and a client, customer, or business associate is involved. Entertainment, such as event or game tickets, has been fully nondeductible since the 2018 tax law change. Record the full amount on the report for reimbursement, but expect only half of the qualifying meal cost to reduce taxable income at filing.

How often should you submit an expense report?

Submit on whatever cadence keeps reimbursements inside the accountable-plan windows, which in practice means monthly for routine spending and within a week or two of returning from a trip. Filing little and often beats saving a shoebox for quarter end: receipts are still legible, the business purpose is fresh in your memory, and approvers are not hit with a backlog. If you are tracking your own deductions rather than seeking reimbursement, a monthly pass through the receipts keeps the year-end total accurate.

Build the report from your receipts in minutes

The slow part of any expense report is turning a pile of receipts into clean rows. Instead of typing each one, upload the batch and let extraction pull the vendor, date, total, and sales tax into a spreadsheet you can categorize and total. It is the same workflow whether you are filing for reimbursement, prepping deductions, or using a receipt scanner built for taxes, and you can create expense reports straight from your receipts instead of starting the spreadsheet from scratch. For the categories themselves, our guide on what receipts a small business can deduct covers which costs belong on the report, and how to track business expenses shows how to keep the totals current all year so the report almost writes itself. If you invoice through FreshBooks, you can also scan receipts into FreshBooks so billable expenses land on the client invoice. For teams outgrowing a heavy expense suite, our Concur alternative covers a lighter way to turn receipts into a report.