1.Detailed report produced on a monthly, quarterly, or yearly basis that accounts for all the expenses a business incurs. This report may be broken down to small subsets of the business to determine how much money each area is costing the company. Expense reports must be maintained for accuracy to ensure that the company is not spending unaccounted for money. Expense reports are also supplied to the Internal Revenue Service each year for tax purposes. During a downturn, companies often turn to expense reports to determine which areas of the business they can cut back on or eliminate to increase profits.