Explore expense management

Completed

In this unit, you will learn about the core functionality of Expense management, its streamlined features, and considerations for planning your implementation to enhance your organization's expense management capabilities.

Expense management capabilities are streamlined for your organization's expense management processes. You can use Expense management to create automated workflows to collect information on payment methods that can be used and to be able to track how often the company credit card is used versus cash, for example. You can also import credit card purchases and monitor the money employees spend on your organization's expenses. You will be able to use the expense policies and other out-of-the-box parameters to set up and manage Organization expenditures across categories and automate travel expense reimbursement.

In the Feature management workspace, you can enable the Expense reports re-imagined feature to simplify the experience and reduce the time needed to complete expense reports. To customize the form fields' visibility, you can add a new Setup page and decide what data is required, optional, or unnecessary when expense reports are entered. When this feature is enabled, a new workspace for expenses will open.

The Expense management workspace is the landing page for creating and submitting expense reports.

Screenshot of the Expense management page. The expense list for travelling to visit the Contoso field office in Dallas, Texas lists expenses for flight, hotel, meals and car rental. For each of these categories, the report displays the amount, payment method, and whether any receipts are attached.

Additional features of expense reports include:

  • Space for tracking expenditures that helps you view your delegate's expenses.

  • Matching experience with receipts to help display receipts at the header level and improve the method of adding receipts to expense lines.

  • Modern read-only grid that allows you to display even more expense lines and additional data columns. Itemized and broken lines, along with their parental expenses, will appear.

  • Streamlined expense editing pane.

The Expense reports re-imagined feature gives you access to delegates' expenses through a modern Expense management workspace. It includes a simple and intuitive pane for editing expenses and an advanced error, warning, and policy messaging system to ensure less downtime due to correcting or waiting for edits to submit an expense report successfully. If issues arise, the expense workflow can guide users to the error and offer suggestions on what to fix.

Expense management also offers gentle policy reminders to users to help the organization stay in compliance. To ensure that you are getting the full experience, make sure you use the Feature management workspace to enable the expense reports receipt matching feature.

Plan expense management

An organization must make decisions and act when setting up Expense management during the planning period before deployment.

You can store details regarding payment methods, required travel requisitions, expense reports, rules, etc., in Expense management. All choices that you make during the configuration of cost management are based on the organization's hierarchy and financial background. Therefore, you must refer to the proper documentation for those areas of concern, such as specific tax rules for your organization or the location of the organization, which could have specific rules and regulations that would need to be accounted for during the planning period.

Per diems

The employee per diem provided by your company must be specified. Because per diems are typically used to cover expenses such as meals, accommodation, and other incidental expenses, you can build guidelines that your company provides for per diem allowances. The per diem might depend on the time of year, the travel destination, or both.

When you evaluate a per diem clause, you can specify that a portion of the per diem rate be withheld if a worker receives free meals or services. You can also determine per diem rate thresholds and set the minimum and the maximum number of hours that are added to a worker's travel by the per diem rate.

Diagram shows how a per diem is disbursed to an employee and then used for expenses. The company sets a per diem, disburses it to employee, and then the employee spends it on approved expense categories: accommodation, meals, and flights.

Implement per diems

You must make several decisions regarding the implementation of per diems. Ask yourself the following questions.

Default per diem rules for the first and last days:

  • What is the minimum number of hours that an employee can claim for a day and still receive a per diem?

  • Is a reduction in the amount offered for meals for the first day and last day? If a reduction occurs, what is the percentage of the reduction?

  • Is a reduction in the amount offered for a hotel for the first day and last day? If so, what is the percentage of the reduction?

  • Is a reduction in the amount offered for other expenses that incurred on the first day and last day? If so, what is the percentage of the reduction?

Default per diem rules:

  • Is a percentage reduction offered in the per diem allowance for each meal if, for example, the meal is complimentary? If a reduction is offered, what is the reduction percentage for each meal?

  • Is the meal reduction calculated for each day, for each trip, or by the number of meals each day?

  • Should per diem amounts be rounded in the regular manner or rounded up?

  • Are per diems calculated on 24 hours or a calendar day?

Screenshot depicts the Expense management parameters page. You can set up defaults for per diem rate tires. You can set up first day and last day defaults: minimum hours for per diem, meal percent, hotel percent, and others. The page also allows you to set up meal reductions for breakfast, lunch and dinner, and choose how meal reduction is calculated. In this example, meal reduction is calculated by meal type per trip. You can also choose the type of per diem rounding, for example normal rounding, and what to base per diem calculation on, for example calendar day with time.

Per diem rules that are based on location:

  • Do per diem rates vary according to location? What locations are included?

  • If per diem rates vary according to location, for each location, what percentage amount is provided for the following types of expenses?

    • Meals

    • Hotel

    • Other expenses

Payment methods

You must specify the payment methods employees are required to use when you allow them to incur expenses on behalf of your company. For instance, you might allow workers to use cash or a corporate credit card. You could also allow employees to use personal credit cards and then reimburse them.

Policies

Policies help guarantee that employees stay within budget, provide all required information, and spend money only as they need to.

Policy rules build into the expense categories the organization developed during the expense planning period.

Screenshot depicts policy rules on the Expense report page. Since policy rules will build into the expense categories your organization developed during the expense planning period, the list of policy rules includes airline, car rental, conference, entertainment, hotel, meals , and so on. The policy rule for hotels is selected. It's effective between 10/28/2020 and 12/31/2154. You can retire the selected policy rule or change its date.

You should consider the following factors for each expense report policy and created approval:

  • Policy name

  • The purpose of the expense policy

  • If intercompany expenses were enabled, to which companies this policy will apply

  • Whether the policy has an effective time frame

  • If the policy has an expiration date

  • The exact parameters of the policy rule

  • The desired outcome of the policy rule

Expense categories and shared categories

When employees create an expense report, each expense they record must be associated with an expense category.

Expense categories are derived from categories that can be shared across legal entities in your organization. These categories can also be shared in Project management and accounting, depending on how your organization is defined.

Note: The expense categories can be shared between Project and Expense, or Project and Production, but not between Expense and Production.

Some widely used expense categories include airfare, lodging, meals, and ground transportation.

Screenshot of the Expense categories page. The Car rental category is selected. It's set up to be used in the project, has a car rental expense defined, and allows payment with cash or credit card.

Questions to consider when establishing expense categories for an organization:

  • What is the type of expense? Categories for flights, hotels, or mileage are examples.

  • Can the expense category also be used in Project management and accounting?

  • What default payment method should be selected for the expense category?

  • Which account is the default for the expense category?