How does one document the tickets in order to claim expenses then?

You can request a statement which will be mailed to you the same day by
1st class post.

At any time? I expect a receipt when I part with cash. If I pay by
credit card I expect a transaction voucher.

Why should I pay a year's worth up front?

You don't. You can charge up your card with only the cost of your next
journey each time.

And the machines tell me what the Oyster single fares are, do they?

Are you just looking for any reason not to get one?

You can get a receipt every time you top up no matter what way you pay.

You can order a statement whenever you want or get a print out from the ticket office.

There will only be a very limited number of possible Oyster fares from next year.
Someone pedantic enough to only be prepared to top up on a per-journey basis
could surely be able to carry these listed on a small piece of paper with their Oyster
for them to refer to?

Otherwise don't bother - pay the higher price - the structure has obviously been designed
to penalise those not from London or the very stupid and it will subsidise the costs for the
rest of us.