Invoicing and expense report management

What is an expense report?

An expense report is an internal document that allows an employee, manager or freelancer to request reimbursement for business expenses incurred with their personal funds.

Unlike a purchase invoice issued by a supplier, the expense report is prepared by the claimant themselves to justify their cash advances.

The expenses concerned are varied: business travel, business meals, accommodation, office supplies, parking fees, tolls, or purchases of small equipment.

The stakes are multiple: obtaining reimbursement for amounts advanced, ensuring tax deductibility of expenses, and recovering VAT when possible. Rigorous management of expense reports ensures compliance with the requirements of the Federal Tax Administration (FTA).

Why implement an expense report management process

A structured process brings concrete benefits to your business. It first ensures complete traceability of all business expenses, essential during a tax audit.

Tax compliance is guaranteed through complete and properly archived receipts. You thus avoid adjustments and penalties.

The administrative time saving is significant: no more back and forth to find a missing receipt or clarify a vague expense. Employees know exactly what to provide and when.

You also gain better visibility on your actual costs by project, client or department. This transparency facilitates budget management and improves cash flow forecasts.

Mandatory elements of an expense report

To be valid, an expense report must contain several essential details. The date of each expense allows establishing chronology and verifying consistency with business activity.

The precise nature of the expense must be indicated: client meal, Geneva-Zurich journey, purchase of supplies. The detailed amount, ideally with distinction between amount excluding VAT and VAT, is mandatory.

Original receipts (till receipts, invoices, receipts) must be attached. The FTA requires these documents to validate tax deductibility and VAT recovery.

The claimant's name and, if applicable, the project or client concerned complete the file. This traceability is crucial for accounting allocation and cost analysis.

Recoverable VAT on expense reports

VAT recovery on business expenses follows precise rules in Switzerland. Your business must be VAT registered to deduct input tax.

Expenses must be strictly business-related and justified by compliant invoices clearly stating the VAT amount. Simple till receipts without VAT details generally do not allow deduction.

Certain special cases deserve attention: business meals are 100% deductible if the business purpose is proven, but personal vehicle expenses follow specific rules.

For mixed expenses (business and private use), only the business portion is deductible. BePaid helps you manage VAT on your expenses. Consult our guide on VAT accounting methods to optimise your tax management.

Implementing an effective internal procedure

A clear procedure avoids misunderstandings and speeds up processing of reimbursement requests. It must cover three essential aspects: reimbursement rules, validation process and archiving of receipts.

Start by documenting your process in a guide accessible to all employees. Define precise rules, clear responsibilities and realistic deadlines.

Digitalisation considerably simplifies management: online submission, electronic validation, automatic archiving. You reduce errors and save precious time on administrative tasks.

Defining reimbursement rules

Establish a clear, written reimbursement policy. Set limits by type of expense: maximum amount for a meal, mileage rate for travel in personal vehicle, accommodation budget according to destination.

Specify authorised expenses and those that are excluded. For example, client parking fees are reimbursable, but parking fines are not.

Define a submission deadline: generally 30 days after the expense to avoid accumulation and facilitate control. Communicate these rules during each new employee's integration.

Mileage rates and meal allowances must be updated regularly and comply with Swiss tax recommendations.

Validation process

Define who validates expense reports according to amounts and hierarchy. A manager can validate up to 500 CHF, beyond that management intervenes.

Set processing deadlines: 5 working days for validation, 10 days for reimbursement. This predictability reassures employees and facilitates their personal management.

Provide a dispute process in case of partial or total refusal. The claimant must be able to obtain a clear explanation and, if necessary, provide additional justifications.

Traceability of each stage (submission, validation, payment) is essential for internal audit and external controls.

Collection and archiving of receipts

Organise the collection of supporting documents from the time of expense. Immediate digitisation via smartphone avoids losing thermal receipts that fade over time.

In Switzerland, retention of accounting documents is mandatory for 10 years. Expense report receipts fall into this category.

Set up a logical filing system: by employee, by month, by project. Digital solutions allow quick search and secure access.

Regularly check that receipts are complete and legible. An illegible or incomplete document can result in refusal of tax deduction during an audit.

Expense report template: what should it contain?

An effective form begins with a header with the claimant's identity (name, department, position) and the period concerned (month or specific dates).

The body of the document presents a detailed table: date, nature of expense, amount excluding VAT, rate and amount of VAT, amount including VAT. A "project/client" column allows analytical allocation.

The total to be reimbursed appears clearly at the bottom of the table, with distinction between amount excluding VAT, VAT and including VAT. The signatures of the claimant and validator officialise the document.

Systematically attach original or digitised receipts. BePaid allows you to manage your purchase invoices and business expenses in a centralised manner, with precise tracking of deductible VAT.

Tools and solutions to automate tracking

To start, a simple Excel or Google Sheets spreadsheet is sufficient. Create standardised columns and share the file with the relevant people.

Dedicated expense report software offers more features: photo capture of receipts, automatic validation workflow, automatic calculation of mileage allowances, overspend alerts.

Integrated accounting solutions connect expense reports directly to your accounting, avoiding double entries and reducing errors.

Automation brings three major advantages: considerable time saving, reduction of calculation and entry errors, and better real-time tracking. BePaid helps you manage your invoices and expenses with integrated VAT management, facilitating tracking of your deductible expenses.

Integration of expense reports into accounting

Expense reports are recorded in expense accounts corresponding to their nature: 6300 for travel, 6400 for vehicle expenses, 6420 for business meals.

Deductible VAT is recorded as a debit to account 1170 (input tax), allowing reduction of the amount owed to the FTA during the next return.

The basic accounting entry debits the expense account and the VAT account, and credits the employee's account (third-party account) or directly the bank upon reimbursement.

Expense reports follow the same logic as purchase invoices in your accounting. Monthly reconciliation ensures that all reimbursements have been processed. Accounting exports facilitate transmission to your fiduciary.

Common mistakes to avoid

Missing or incomplete receipts are the most common error. Without a compliant supporting document, it is impossible to deduct the expense or recover VAT.

Mixing personal and business expenses exposes you to tax adjustments. Rigorously separate the two types of expenses.

Submission delays complicate management: an employee who submits their reports after several months disrupts accounting and cash flow.

Non-compliant VAT (receipt without VAT mention) prevents recovery of input tax. The absence of formal validation weakens traceability. Poor archiving exposes you during tax audits. These errors have concrete consequences: refusal of reimbursement, tax adjustment, loss of VAT deduction.

Practical cases and examples

Freelancer on client visit: Meal 35 CHF including VAT (VAT 8.1%), parking 15 CHF, train ticket 45 CHF. Receipts: restaurant receipt with VAT, parking ticket, SBB ticket. VAT recoverable on meal if invoice compliant. Total reimbursable: 95 CHF.

SME with travelling sales staff: Personal vehicle 250 km at 0.70 CHF/km = 175 CHF, accommodation 180 CHF including VAT (VAT 3.8%), meals 50 CHF including VAT. Receipts: signed mileage log, hotel invoice, restaurant receipt. VAT recoverable on accommodation (special rate 3.8%). Total: 405 CHF.

Purchase of office supplies: Paper, pens, folders for 120 CHF including VAT (VAT 8.1%). Detailed invoice with VAT mention. VAT fully deductible. These examples show the diversity of situations and the importance of appropriate receipts.

Rigorous management of expense reports protects your business from a tax perspective and simplifies your accounting. By implementing clear reimbursement rules, a structured validation process and a compliant archiving system, you avoid costly errors and save precious time.

Automating expense report tracking considerably reduces the administrative burden. Receipts are centralised, recoverable VAT is correctly identified, and accounting integration becomes smooth. This organisation also allows you to maintain a clear view of your business expenses.

To go further in automating your financial management, BePaid helps you create your invoices compliant with Swiss standards, track your payments and manage your VAT in a few clicks. Try the platform for free and simplify your invoicing today.