An Expense Report is a tool that an organization makes uses of to determine what expenses have incurred during the year for the organization. Many a times, organizations make an expense report on a quarterly basis (there are 4 quarters in a year) to determine how much expense has the organization bared, from where it was paid and a breakdown of those expenses. These expenses are totaled and then compared at the end of the year to determine which quarter was more expensive and what was the root cause of it. When an accountant is set to make a yearly expense report, there are some key elements that need to be present in the annual expense report. Without these elements, the annual expense report would cease to comply with auditing reports and standard and the whole point of conducting an expense report would be moot.
The first key element is to include whether or not the annual expense report is for the whole organization (whether or not the annual expense report is a holistic annual report or not) or is it for a specific branch, specific territory or for a specific region. Ensuring that this is mentioned in bold and clearly will come in handy in the long run and would ensure that expenses are maintained in a neat and organized manner. The second key element is the breakdown of each and every quarter. Each and every quarter may be further divided into sub divisions to include any expenses that are external or internal. These sub divisions include traveling, salary, office supplies, misc. and etc.
By doing this, many organizations are getting an idea of what division is costing more or less and then thinking up effective and efficient solutions to reduce cost. The third key element is the total. As meager as this aspect sounds, it is extremely important. Note that this is not the grand total which is being mentioned, but the total of each quarter and the total regarding the subdivisions in each quarter. This makes comparison easy and analysis much more in depth. Executives and auditors who would need to review the expense report further on would be able to pass their judgment in an easier way if totals of each and every division is made available. The fourth key element that more than often is neglected are notes at the end of the report. This space is dedicated to accountants who may want to write their opinion or may want to mention a key aspect of the annual expense report which needs further explanation. Dedicating a space especially for notes would ensure that the report is comprehensive and ever singly detail is explained. Another reason why notes are important is because many times, executives or others who aren’t well versed with accounting and numbers may have difficulty in analyzing the report. Notes tackle that problem and make it easier for other to understand the goings of the report.
