Expenditure Receipt

What is an expenditure?

Expenditure refers to the amount paid in cash or credit at one time for the purchase of goods or services, in contrast to the expense which is the payment of various commodities over a period of time. In this context, expenditure refers to the amount paid by the salesmen or service providers for purchases made to fulfill the assigned task by the customer.

What is an Expenditure Receipt?

Often there are conditions where the salesmen or service providers have to spend from their own pockets to fulfill the task assigned to them. Some of these expenditures include buying raw materials, travel charges, buying spare parts, etc. The service provider tends to keep a record of all these expenditures so that they can be claimed from the customer along with the bill. These expenditures are placed under the title of reimbursable charges.

Thus, to claim the reimbursable charges, the company issues an expenditure receipt separately or with the receipt of the actual services. Along with this expenditure receipt, the detailed proof of the transaction made by the company is also attached, for example, a sales receipt.

Expense VS Expenditure

There is a sleek difference between expense and expenditure. The companies can claim the reimbursable expenditures from the customers only. So, it is important to know the difference between both.

  • Expenditure: It is the amount paid by the company/business/contractor to buy items or avail service in order to do the job. This payment is made at that particular time and a receipt is received by the company. An example of such expenditure is the purchase of 100 sacks of cement worth $1,000/- will be claimed by the company from the client.
  • Expense: This is an over-period amount spent by the company in order to earn revenue. The payment for these is done as per the need within a period of time. An example of this is the payment of rent of the building, the pays of the staff, the purchase of office furniture within a month or year- can not be claimed from the clients.

Creating an Expenditure Receipt

Following steps are to be followed in order to create an expenditure receipt:

  • Ensuring Proof of Expenditure: First things first, at the instance when an expenditure is made by the company, the representative should ensure that it has been made billable and significant proof of the transaction/purchase should be ensured at that time. This bill or proof is kept by the company and later attached to the expenditure receipt.
  • Record Keeping of Expenditure: As soon as the billable expense is made, the company should add the expense in a manually or digitally kept record so that there are no hassle tracking expenses at the time of issuing a receipt.
  • Expenditure Breakdown: To keep a record of the cash outflows of the company and for clarification purposes at the client’s end, it is important that the total amount spent on expenditures and its breakdown are recorded and mentioned.
  • Invoicing Expenditures: Depending upon the job assigned, at the end of the contract or periodically the expenditures are invoiced to the client. All the previous kept records of the expenditure are simply converted into a receipt by adding the following information:
    • Company Credentials
    • Customer Credentials
    • Receipt ID
    • Expenditures Made
    • Expenditure Bill
    • Applicable Taxes
    • Receipt Date
    • Bill Due Date

It is generally recommended that a more professional way to do this is including the reimbursable expenditure within the actual receipt for the contract. This is for two purposes, first, it is difficult to receipt every other expenditure made, and second, it is easier for the customer to pay the whole amount together, instead of multiple payments every now and then. Thus, a combined receipt serves both the interests of the company and the client.

  • Expenditure Proof: As mentioned earlier, as soon as the expenditure is done, its subsequent proofs and receipts should be kept. Now, these receipts and proofs are attached to the expenditure receipt to maintain the transparency and avoid confusion.
Expenditure Receipt Template for Excel