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What is itemized receipt, and why it's important?

What is an itemized receipt?

Even everyday things like business travel, if not done in the right way, might result in unwanted expenses that can affect your company. In order to reduce your accounting errors, you should understand what an itemized receipt is.

An itemized receipt serves as evidence of purchase that is transferred from a vendor to a customer upon successful payment. 

Regular receipts and itemized receipts are similar. They both have the date and time of service or purchase, the transaction provider name, the receipt number, the total amount, and the payment method. Some receipts may additionally provide return policies, contact details, or phone numbers. 

An itemized receipt is a more detailed receipt and it also contains each item listed in the complete transaction and sales tax connected to different objects or the total amount.

From balancing employee spending to keeping track of transactions for tax purposes, an itemized receipt can provide full financial legitimacy for all corporate activities. In addition, for businesses who want to learn more about how their employees are using company funds, an itemized receipt is a more precise collection of that data.

The itemized receipt can be requested at the end of the project, or service or request itemized invoice beforehand to determine the total cost.

Itemized receipts and business trips 

Although this kind of receipt is beneficial in many work areas, we'll focus on one particular, business travel. Frequently, companies ask for receipts instead of paying for business travel and then reimburse the employee after the travel. 

When the employee goes on a business trip and stays at the hotel, the receipt they receive at the end of the stay indicates payment for accommodation and the total amount. However, within that total sum, there could be other transactions that need to be recorded individually for accounting purposes. For example, part of the money may go to room charges, resort fees, room service, daily parking, a spa, or a mini-bar. The company perhaps won't agree with some of the expenses made, and with the help of itemized receipts, those services the company won't agree with and won't refund money on can be seen.

Travelspot app issues the receipts with all of the information included (PIN, the name of the company, billed items, etc.).

When doing a regular checkout at the front desk, a person traveling for business can ask for itemized receipt there.

However, travelers on a strict schedule might have to make a quick dash to the airport and won't have sufficient time to stop by the front desk first. It's appealing to avoid a huge queue at the front desk and simply exit because many hotels no longer demand an official, in-person check-out.

In a situation like that, travelers may phone the hotel afterward and ask for the itemized receipt through email.

Additionally, although uncommon, hotels may double charge by mistake for hotel services or put a cost to the incorrect account. It's crucial that reconciliation unravels any billing issues since errors do happen.

An itemized receipt makes it simple for the customer to clearly understand what they were billed for in order to affirm the correctness. Customers can get in touch with the hotel and ask for a refund or compensation if anything was charged by mistake.

Employee fraud quota may also be reduced through itemized receipts. Each item is stated separately, allowing for the identification of out-of-policy transactions and the denial of compensation.

For example, some businesses don't include alcohol in their employees' lunch allowances for the day or exclude souvenir buying from the budget allowance. These can be removed from a final cost with the help of itemized receipts, saving the company money.

Business owners have a more thorough understanding of a complete trip by demanding an itemized receipt because it’s allowing them to properly allocate expense policy.

For companies: a guide on how to itemize receipts

If you want to save time and money while sorting out your company's paperwork, you can enter data on employee expenses with an itemized receipt template.

Travelspot will explain the needed requirements:

1. The itemized receipt copy acquisition

You can find receipt templates on different websites, so try to find the template that suits your business the most.

2. Merchant information of the payee

The receipt number, date and time, merchant's name and phone number, as well as merchant's street address along with city, state, and postal code are indicated in this section.  One must provide a unique number that will be used to identify this paperwork in the field marked "Receipt number" at the beginning of this section.

3. Identification of the party who paid the payment

There is a special section called “Sold to” where one needs to specify the individual or a business that has submitted the payment that is being documented. Phone number, street address, city, state, and postal code also must be specified. 

4. Documentation for each paid product

Lastly, there is a special table. In this table, you need to enter the details for each product that an employee has paid for. First, there is the “Description” column, where you enter and describe every item in its own row, and in the second column ”Quantity”, you need to enter the number of items. In the third column “Price/Unit”, enter the cost of a single item. “Quantity” multiplied by the “Price/Unit” will lead you to the fourth column named “Line total”.

“Discounts” are also taken into consideration and they are entered in a separate line, as well as “Subtotal” (sum of the “Line total”), “Sales tax” (enter when required), the “Total” (sum of the money to be paid) and “Amount paid” (the money employee paid). If your company’s policy does not cover some items, you can extract them from the 'Total'.

Finally, in the bottom of the left-hand corner, there are “Payment method” and “Card/Check Number” sections, so if the payment was made with a credit card or a check, it must be documented on the empty line next to it.

How can Travelspot help you? 

Itemizing receipts will save you from accounting issues and unnecessary expenses that you could have easily avoided.

Simplifying and promoting efficiency is essential in this fast-paced world. Our managers at Travelspot, who assist in all your business travels, will always give you an itemized receipt for every paid booking or service. We also recommend that you do the same. Request itemized receipts from banks, businesses, employees, etc., with the important purchased goods issued separately.

With that in mind, your trips should be a lot easier to handle - in addition to us arranging the best business trips at a reasonable price.

What do you think? 

If you have any questions or additional eagerness for knowledge about itemized receipts and the importance of the process of itemizing them, feel free to contact us. 

We want to hear from you!