Expense can be defined as the cost of a product or service, that an employee incurs, (buys or consumes) while working for the organization, during the period of his / her employment.

An example can be telephone bills, motor vehicle expenses, or meal expenses, which the employee incurs and later presents the bill to the HR department. The HR department can then approve the expense and pay it to the employee.

Usually, expenses are variable in nature, for instance when an employee travels, they would not know how much meals can cost, so they are usually claimed after the expense happens.

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