NetSuite recently released new functionality for entering expense reports that allows companies to enforce policies on what is admissible for expense reimbursement.
To demonstrate this functionality, it is easier to understand by going through an actual use case.
Company A, a consulting company, has created the following policies for submitting expense reports:
- Meals will be reimbursed for a total of $50.00 per individual per day.
- Entertainment will not exceed $100.00 per submission unless approved by a supervisor.
- Sometimes clients will agree to reimburse consultants who have to work late. Clients will reimburse the dinner meal for up to $30.00 and will require a receipt.
Expense report policies maybe set up in Netsuite at Setup>Accounting>Expense Report Policies>New.
NetSuite setup for Policy 1
Below is a screenshot of how to create the meal policy with field setup descriptions.
Name: This is a text field where you can provide a title for this policy. In this example the title is Global meal policy.
Start date: NetSuite will apply this policy for any expense report dated between 1/1/21 and the end date. If the end date is left blank the policy will stay in effect indefinitely.
Subsidiary or Department: This policy can be created specifically to a subsidiary or department. If left blank it will apply to all.
Customer: A policy can be customer specific or project specific if enabled. This would apply to expense reports that are billable to that customer or customer specific project.
Expense Category: This is a multi-select field. When this expense category is selected, the policy will apply.
Billable: These rules can be setup for billable expenses or non-billable.
Limit Type: There are three rule types to choose from.
- Per day: NetSuite will apply the rule on a per-day basis. For the example above, per day was selected as that was the company policy.
- Per Individual Expense Line: This rule will apply on each line
- Per individual expense report: This rule will apply on the entire expense report
Maximum Amount: Value of any limits. In this use case it is $50.00 per day.
Action: What will happen when you violate the rule:
- Do not allow outside the limit. This will prevent the user from saving the report until the policy is met. In this use case, this was selected as the policy does not allow anything greater for any reason.
- Warn but allow expenses outside the limit. This will warn the user but allow them to save the ER.
Requires Memo or Requires Receipt: This will force user to add a memo and receipt. In this use case, receipts are required globally so this would be checked.
Overage Notification: If there are any violations, specific recipients can be notified.
Once all the fields are selected and the user saves, this will now be effective based on the start date.
NetSuite setup for Policy 2
Below is a screenshot of how to create the entertainment policy. Given that supervisor approval is allowed, the action is a warning versus a complete disallow. This will let the supervisor review and approve or reject the expense report.
NetSuite setup for Policy 3
Below is a screenshot of how to create a customer-specific policy at the project level. This policy shows #41 in the customer field, which is the project number. This is a drop-down field where the user can select either a customer or customer project. This policy will only apply for that customer project.
Expense Report view when policy is violated
Below is an example when the employee is entering an expense report and they have violated the Global meal policy. The user will receive this error and will need to go back to the expense report and make the necessary corrections. The policy was $50.00 per day; as you see below, the value entered exceeded that value.
When a user clicks the button “Show policies,” they will see the following. Once corrections are made, the expense report can be saved.
This new NetSuite feature will help companies enforce certain policies for expense reimbursement. Because this feature was just released, we can expect more enhancement to come. But even as it stands, the functionality offers companies much benefit.