Business Expenses Report Accounting

Expense report accounting is at the heart of business expense management. The expense report provides evidence of the costs incurred by employees and business executives for their company. The reimbursement of these expenses is recorded in the accounting books, which must contain documented and regular entries. Understanding the principles and developments of expense accounting is essential to ensure optimal management.


Reading time : 8 min


  • What is expense report accounting?
  • How to record an expense report?
  • What are the latest developments in expense report accounting?
  • How has new technology transformed expense report accounting?
  • What are the benefits of an expense management software?

What is Expense Report Accounting?


Expense reports are expenses incurred by employees and executives as part of their professional activity. The costs of expenses supported by regular receipts must be reimbursed by the company. As a result, expense reimbursements are included in the company's accounts.

Expense Report Reimbursement

Several categories of business expenses can be reimbursed by the company. However, reimbursable expenses must have been incurred as part of the professional activity. Furthermore, some costs must be reimbursed while others are optional.

Types of Business Expenses


A wide variety of expenses can be reimbursed by the company. Most, however, fall into one of these categories:

  • Meals/Restaurant: expenses for meals
  • Transport and travel expenses: train or plane tickets, parking costs, car rentals.
  • Accommodation on business trips
  • Entertainment costs (e.g. business meals with clients/customers) and client/customer gifts

Reimbursement Methods

The company decides in advance how it will reimburse the business expenses incurred. The method of reimbursement is defined by the company's expense reports policy.

There are two possibilities for reimbursing business expenses:

  • Simplified (per diem) expense reimbursements
  • Actual expense reimbursements

For per diem reimbursements, the employer decides in advance the amount that will be reimbursed for a given expense. For example, restaurant costs for clients. 

The person incurring the expense will be reimbursed the predetermined per diem amount, regardless of the actual amount used.


In the case of actual expense reimbursement, the amount actually spent and documented is reimbursed in full.

Expense Report Accounting

Expense report reimbursement is regulated by law. The company is required to provide supporting documents for any reimbursement of actual expenses. Some business expenses are exempt from taxes (social security contributions). Consequently, expense reports are audited and the company may face a tax adjustment if the expenses reimbursed are not substantiated by receipts.

Reimbursed expense reports are recorded in the accounts. Reimbursements must be carried out within the General Chart of Accounts (GCOA). An accounting error usually results in a tax adjustment the following year. Thus, it is crucial that expense reports are adequately recorded in the company's accounting system.

How to Record Expense Reports?

The accounting department records the expense reports in the accounts. At this stage, the team managers should have already checked the receipts. However, the accounting officer may still carry out a qualitative control, in particular to check the expenditure ceilings.

The methods of reimbursement (per diem and actual expense) have no impact on the accounting of business expenses. All business expenses are recorded in the expenses, class 6 account. More specifically, this is the external expenses account (class 62 account).

The Accounts to Be Used to Record an Expense Report

The majority of business expenses are recorded in account 625. However, the gifts will appear in account 623. The type of expense will determine which expense account to use for accounting purposes.


Account 6251 is used to record travel expenses. This includes all staff travel expenses, when the trip is not related to other costs. This includes train or plane fares, parking fees, tolls, etc.

Mileage allowances are recorded in account 6414 "Allowances and other benefits". The account 6135 should be used for a car rental during travels in France or abroad.

Note that reimbursements of transport expenses for travels between home and work are recorded in account 647 "other social costs".

Mission Expenses

Mission expenses are recorded in account 6256 "missions". These are the expenses incurred by employees when they are on a mission for the company. Meal expenses (excluding client invitations) are recorded in this account.
This account covers all costs related to the mission. Transport costs in connection with a mission are recorded in this account and not in account 6251. The same applies to catering expenses related to the mission.

Catering Expenses


Account 6257 "Catering" is used to record all catering expenses incurred when inviting clients/customers. Catering expenses without client/customer invitations are recorded in account 6256.

Client/Customer Gifts

For the accounting of gifts purchased by an employee and offered to clients/customers or prospects, the account to be used is 6234 "gifts to clients/customers".

Telecommunication expenses

When an employee incurs telecommunication expenses on behalf of the company, they should be entered in account 626 "Postage and telecommunication expenses". This account covers, for example, telephone calls expenses.

How to Enter an Expense Report?

Recording expense reports is a required step for reimbursement. In double-entry accounting, every transaction or event must be recorded in two accounts: a debit transaction and a credit transaction. For the reimbursement of expense reports, the debit transaction is recorded in the expense accounts and the credit transaction is recorded in account 421 "staff - due payment".

Debiting Expense Accounts

Entering the amount of the expense (excluding taxes) in the relevant expense account is the first step to record expense reports in the accounting system.

Debiting the input VAT account

When the VAT is deductible, i.e. when the VAT can be recovered, the VAT amount is debited to account 4456 "Deductible VAT"

Expenses Subject to Social Security Contributions

Some business expenses are subject to taxes (social security contributions). In this case, the part subject to social security contributions is entered in account 6441 "Allowances and other benefits". The part not affected by contributions is included in the expense account.

Crediting Account 421

To counterbalance the debit on the expenses and VAT accounts, the amount including all taxes is credited to account 421 "staff - due payment".
Note that for a given reimbursement the amount credited to account 421 must be equal to the sum of the amounts debited to the expense and VAT accounts.

Example of Business Expense Report Accounting

Below is an example of accounting for catering expenses amounting to €60.

comptabilite example

How to proceed with the reimbursement?

The business expenses reimbursed are indicated on the payslip either net or gross, depending on whether they are subject to social security contributions. The reimbursement is carried out with the payment of the salary.

However, the expense report accounting policy may provide for reimbursement outside of the monthly salary payment. In this case, the repayments are separate and usually occur on a fixed date: for example, every week or two.

Developments in the Processing of Expense Reports


In recent years, artificial intelligence (AI) has revolutionised the world of work and business experiences. Accounting is no exception.

Traditional Computerised Accounting

With the development of computerised systems, accounting has mainly involved the use of Excel spreadsheets.

Accounting software has been developed, but it still requires human intervention, even for simple data recording tasks. These accounting models are time-consuming and particularly costly for companies.

For large companies, because of the large number of accounting operations, accounting can be an overly complicated process. The risk of error is significant which may cost the company dearly in the event of a tax audit.

For small companies, the accounting department is often limited to one person. Even if there are fewer accounting operations than in large companies, a very small team does not allow for effective control which also increases the risk of error.

The AI Revolution in Accounting

New digital technologies are now being applied to accounting. These technological developments allow accountants to focus on their core business and companies to save valuable time and costs.

The new features include the ability to automatically extract accounting data from paper documents (such as invoices): date, amount, VAT and other information related to the expense. Business expenses can also be transmitted in real time to the accounting department for faster reimbursement. This is now possible since digital expense reports have been allowed by the tax authorities.

Smart solutions such as Jenji now offer automated processing of expense reports and optimised accounting management. Studio is an expense audit and reporting tool powered by Jenji. The module offers a sophisticated analysis of expenditure data to optimise expenses.