A good way to document T & E expenses is with an appointment book or log, noting each time you incur a business expense, and the reason. Most folks aren't disciplined enough to write down every expense as it is incurred. It is okay to put together a log or diary after you have received an audit notice. But be up-front about it -- don't insult the auditor's intelligence by trying to pass off wet-inked paper as an old record. Remember, it's key to develop and maintain credibility with the auditor.