For the smooth running of its activities, a company must take into account certain parameters. The administration of an expense report is therefore a very important point that concerns most companies.
The latter question the subject even more, on its functioning. If you’re a business owner, read this article and learn more about how an expense claim works.
What are the conditions to be able to make an expense report?
An expense report is an expense undertaken by an employee for the purpose of a professional activity. Indeed, it is a document or a sheet that allows any employee to receive reimbursement for professional expenses that he himself has incurred on behalf of a company.
These costs may relate to several areas such as catering, transport, accommodation or any other expense that has been undertaken in order to bring profit to the company.
There are two types of expense reports, classic expense reports and mileage expense reports. For classic expense reports, this is a detailed statement of expenses incurred while for mileage expenses, the user must specify the different levels of his journey. As soon as the note is validated by the administrator, it is created as an accounting document.
However, to make an expense report and for it to be validated, certain conditions must be met. First of all, the expenses must be incurred for the needs of the employee’s professional activity and in the interest of the company. Then the expenses must be reasonable amounts.
More clearly, they must be proportionate. Otherwise, they will be taken into account by the administration as salary supplements. Finally, they must be accompanied by invoices. If these conditions are not duly fulfilled, no expense report can be established and therefore, no fee will be paid.
Is there a maximum amount to know for an expense report?
The reimbursement of costs incurred by an employee is an obligation for the employer. However, it must first be specified that there are 3 modes of reimbursement of expenses:
- Actual costs
- Flat-rate fees
- The additional deduction for expenses
Usually, there is not a daily, monthly, or annual maximum amount for actual charges. However, a limit should not be exceeded. Thus, catering costs in addition to an allocated sum must not exceed 73.20 euros. In addition, the limit value for installation costs in a new rental is capped at € 1,466.20.
With regard to flat-rate professional expenses, they relate to catering, travel and accommodation. The reimbursement of these costs is in the form of rewards and their amount cannot exceed certain values. By way of example, for a meal allowance during professional transport, the maximum amount is 18.40 euros (6.40 euros per meal taken in the company).
As for the additional deduction of costs, it only applies to artists, construction workers or sales representatives. As the calculation of contributions takes into account bonuses, salaries and indemnities, the amount of the deduction cannot exceed the value of 76,000 euros.
What is the mandatory information that must appear on an expense report?
To avoid any form of dispute, the expense report must contain certain details. Several elements must therefore be seen in order for it to be validated. The expense report is generally in the form of a table where some mandatory information is mentioned. These include:
- The date of the establishment of the expense report
- Object of expenditure
- The total amount expressed excluding tax and including VAT (All Tax included)
- VAT (Value Added Tax)
- Travel, accommodation, meals, subscription costs (telephone, internet)
- The surname and first name of the employee
Depending on the purpose of the expenditure, additional information must appear on the expense report. Thus, the name of the hosts for catering costs, the reason for the operation, the place of travel for accommodation costs and the distance traveled must appear.
With regard to vehicle costs, the mileage performed, the number of fiscal horsepower of the vehicle, fuel costs and toll costs should be visible.
The expense report is nominative and dated. It is because of its importance in the meticulous management of the company that it must be detailed and formalized.
Can I benefit from a tax reduction?
A tax reduction is a value subtracted from the amount of tax. It is different from the deduction and the tax credit. Only the gifts (in kind or in cash) which have been made to certain associations allow to benefit from a tax reduction or even to cancel the latter.
Associations recognized as being of public utility, business foundations, cultural and charitable associations, electoral financing associations, etc., are those likely to receive donations. They issue tax receipts thanks to which a company, an individual can benefit from an income tax reduction ranging from 66% to 75% of the amount.
In addition, it is also possible to benefit from a tax reduction on real estate wealth. This is 75% of the amount.