What is the function of an expense report?

An expense report is a vital financial document used primarily to request reimbursement for business-related expenses incurred by employees. When an employee spends money on behalf of the company—whether for travel, meals, supplies, or other operational costs—they compile this information into an expense report. This report typically includes receipts and details of each expense, ensuring that everything is well-documented and aligns with company policy.

Utilizing an expense report helps organizations maintain transparency and accountability in their financial operations, allowing for thorough auditing of expenditures. This process not only facilitates reimbursement for employees but also aids the company in tracking and managing its operating costs effectively.

The other options relate to different financial functions: outlining profit margins pertains to overall financial health, analyzing sales performance focuses on revenue generation, and documenting inventory levels involves managing physical goods in stock—none of which directly connect to the purpose of an expense report.