Expense process overview

Expense process overview

Expense Module is designed to allow Employees to submit work / business related expenses. For payroll / salary reimbursements refer to article on Claiming Salary Reimbursements. The approval workflow can be configured to include the Manager, Department head, Account head who can reject, modify or approve the request.

1. Claim Types

Your company might have different types of claims, some need to be approved by Department Head, others by Manager and some might need multiple step approval. This can be achieved by defining different claim types having different approval work-flow.

You can create custom claim types and there are some predefined claim types which integrate data across modules. Predefined claim types cannot be deleted but can be deactivated if they are not needed.

1. Project Expenses - this claim type is available when Project module is activated. While claiming this claim type employee will need to select the project to which has been mapped. Project expense can be sent to Project Manager for approval.
2. Travel Expenses - this claim type is available when Tour feature in Attendance and Leave module is activated. While claiming Travel expense employee can map the approved Tour requests with the claim request, the cost of Accommodation and Ticket booking updated by Travel Desk against the Tour form will be visible in the expense form to all.

2. Expense Categories

There are four expense categories which can be used to claim expenses
1. Outstation Travel Expenses – used to claim expenses incurred on outstation travel
2. Local Conveyance – for local travel / conveyance expenses
3. Periodic Official Expenses – monthly, quarterly expenses like mobile bills or subscription charges
4. Miscellaneous Expenses – the category is used for all other expenses which do not fall in any of the above categories

Each category has a predefined structure and the inputs needed are different.

3. Expense Heads

Within each category multiple expense heads can be created. For example -
1. Outstation Travel Expenses – Airfare, Hotel stay, Daily allowance
2. Local Conveyance – Taxi, Own car, Own two-wheeler
3. Periodic Official Expenses – mobile bills
4. Miscellaneous Expenses – Hiring expenses, Client entertainment, Employee benefits etc

Expense heads can be designed based on a policy for example a company might have a policy that if you are above a certain grade you are entitled to a daily allowance of USD 100 per day and below the grade the allowance is USD 75. This can be modelled using policy at head level. Refer Expense Setup write-up for more details.

You can have different work flow for expenses which are within a policy or expenses which are violating policy. The base scenario where policies are not used is shown below -


 If policies are used then the workflow can be designed as shown below -


4. Expense Claim Status

An expense claim goes through multiple steps; it can have the following status
  • Draft - Expense request has not been submitted
  • Submitted - Expense request has been submitted for approval (in case of multiple approvals till the last approval is received status will remain as submitted)
  • Withdrawn - Expense request has been withdrawn
  • Resubmitted - Expense request has been resubmitted for approval once returned by Approver
  • Approved - Expense request has been approved by Approver
  • Rejected - Expense request has been returned by Approver
  • Verified - Expense request has been verified by the Verifier
  • Paid - Expense request has been paid
  • Payment in Process - Expense request has been partially paid

When an expense claim is in Submitted status it can be
1. As per policy – when all entries are as per policy and there is no entry which is without a policy
2. Policy exception – when one or more entries are exceeding policy or there is a head which is without a policy

5. Multiple Company Workflows

In a multiple company organization, the employees might be incurring expenses on account of another company. The approval workflow for such expenses can be mapped to the company for which the expenses are being claimed. The scenario is explained with the help of an example below.
Example
Employee - Pradeep Das belongs to ABC Enterprises
Approval workflow is Level 1 approver = Manager, Level 2 approver = CEO. Verifier = Accountant.
Accountant and CEO roles are mapped by Company.

Pradeep creates an expense, maps it to Acme Corporation and submit it.
Level 1 approval - done by Abhay Singh (this role is not based on company)
Level 2 approval - done by Nilesh Parmar (CEO of Acme Corporation)
Verification - done by Vibhor Singh (Accountant mapped to Acme Corporation)

Pradeep creates an expense, maps it to ABC Enterprises and submit it.
Level 1 approval - done by Abhay Singh
Level 2 approval - done by Aditya Singhal (CEO of ABC Enterprises)
Verification - done by Tapas Pal (Accountant mapped to ABC Enterprises)
For this scenario to work
1. Employees will have to select the company every time they create an expense
2. Desired Approver / Verifier roles will have to mapped by company

To enable multiple company workflows you will need to activate the "Track expenses by Company" parameter in Expense setup.

6. Advance

While creating an expense claim outstanding advances can be adjusted. If Payroll module has been activated then advances beyond a certain date can automatically be adjusted through payroll.

7. Managing Currencies

While multiple currencies are allowed a particular advance request or expense claim can be of only one currency. Payments for an expense claim can be made in a currency which is different from the claim currency.

See article on Setting up currency for more details.

8. Payment Options

Payment of advance or settlement of expense claims can be done through multiple payment modes. Options available are - Cash, Cheque, Company Credit Card, Company Debit Card, Bank Transfer and ECS. Each employee can declare the preferred payment mode, refer to the article on My Profile for more details on how to update payment modes.

9. Customization

You can add new expense types, new heads with policies with additional attributes and custom fields in the expense form header.


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