Every business has expenses and sometimes these expenses fall on the employees. Employers use expense reimbursements to pay their employees back when they have used their own personal funds to pay for business-related expenses. If you’re self-employed, these expenses become tax deductions instead.
What is a reimbursement receipt?
In order to be reimbursed for the expense, you must be able to show proof that the expense actually occurred and that personal funds were used during the transaction. You can do this by providing the original receipt received during the transaction.
Using expense reimbursement invoices, an organization can track expenditures for a specific task or department. Doing so helps employees reimburse themselves if they use personal money for business expenses. A similar program assists companies in tracking real earnings, including expenses.
A good reimbursement receipt system set up in any company clearly outlines what expenses are covered, the process for requesting reimbursement, and what documentation is needed. Although not mandatory, it is customary for businesses to reimburse for certain expenses.
What expenses qualify for employer reimbursement?
Expenses that businesses typically reimburse for include those that are necessary to the operation of the business. These typically include the following:
- Office expenses such as supplies and services
- Conference fees
- Registration fees
- Transportation when traveling for business
- Parking fees
- Car rentals
- Meals when traveling
- Lodging expenses
When is a receipt required for reimbursement?
Unless business travelers are using per diem for incidental expenses and meals, receipts are required for business and expenses. The employer may reimburse employees by submitting expense reports with the required documentation in writing to the company within 60 days after returning from a business trip.
An original receipt is a written acknowledgment that the vendor has been paid for providing goods or services
Original paper receipts should be provided according to the type of expense and dollar limitation. A credit card statement does not meet receipt requirements. Scanned copies will be accepted for originality if the same standard exists on paper receipts. If you’re going to scan receipts and other documents, you’ll want to keep this document safe, clear and readily available.
The receipt should include all documentation containing these five IRS-required items:
1. Names and companies you paid
2. Payment date for the transaction
3. Description of the goods you bought and why it was purchased
4. Total payment
5. Payment method
How can you keep your receipts organized for business purposes?
It can be difficult to track of financial documents and to keep and store your business receipts separate from personal receipts, especially when traveling for business. Receipt scanning apps with receipt software such as Shoeboxed can save you a lot of time and frustration. These apps can organize receipts, categorize, and make receipts easily searchable and accessible at any time from any where. They can even create comprehensive expense reports. They are also a valuable tool if you or your business is ever audited.
Caryl Ramsey has years of experience assisting in different aspects of bookkeeping, taxes, and customer service. She uses a variety of accounting software for setting up client information, reconciling accounts, coding expenses, running financial reports, and preparing tax returns. She is also experienced in setting up corporations with the State Corporation Commission and the IRS.
Shoeboxed is a receipt scanning service that supports multiple methods for receipt capture: send, scan, upload, forward, and more!
You can stuff your receipts into one of our Magic Envelopes (prepaid postage within the US). Use our receipt app (iPhone, iPad and Android) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.
Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.
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