Ensure Expense Management Compliance With Dynamics 365 Finance and Supply Chain Management
Dynamics 365 Finance and Supply Chain Management is an incredibly helpful tool to help you enhance your expense reporting.
With functionality enabling simple report creation, configurable approval workflows, or reporting on the go, it ensures that your solution can be curated to your organization’s processes and needs.
In this blog, we will discuss expense management policies, highlighting what they are, why they are important, and how you can configure them to suit your business.
What are Expense Management Policies?
The Finance and Supply Chain Management expense management functionality includes policies. These are internal controls to ensure spending guidelines, regulatory requirements, and other organizational expense standards are upheld.
You can create a policy associated with one or multiple legal entities containing various rules. The policy rules are where we can identify the guidelines: defining our conditions and the consequences for team members who do not follow them.
Expense Policy Use Cases: How They Function in Business
Expense policies help you control costs and play a key role in ensuring your various team members adhere to company standards. They also help your organization stay compliant with tax laws and accounting standards. They also help you track and audit expenses quickly and easily. Here are some use cases:
- For a business employee to submit an expense report, car rental, hotel, and airline transactions must have attached receipts, or the system won't approve the report.
- If a team member buys a business class airline ticket rather than an economy ticket, they must justify the purchase when they submit the report.
- When employees submit a meal expense over $75.00, they must attach a receipt before submitting their expense report.
How To Configure Expense Policies in Dynamics 365 Finance and Supply Chain Management
1. To configure an expense management policy, navigate to Expense management > Setup > Policies > Expense report.
Let’s walk through the configuration for the third use case listed above: requiring receipts for meal expenses over $75.00.
2. Click “+New” and input a policy name and description.
As a reminder, a policy can have multiple rules. Think of this as the header where you add lines (rules). For this example, we will call the policy “Expense policy – all entities.”
3. If your organization has multiple entities, identify which companies this policy should apply to.
To do this, select an option from the “Available organizations” table and click the arrow pointing to the right.
This should result in the company name being displayed in the “selected organizations” table. Repeat this step as many times as needed to select all applicable entities.
The next step is defining the rules in the Policy Rules fast tab.
4. Start by selecting an option on the left side.
This will define where the rule should be applied. For our example, we will select “Meals.” This indicates that the rule we create should be associated with the expense type of “Meals.” Then, click “+ Create policy rule."
5. Once you click “+ Create policy rule”, you’ll be directed to a new form in which you’ll configure the rule.
First, input an effective date. Then, if applicable, input an expiration date. If this rule should not expire, keep the default value of “Never” in the field.
6. Next, we need to define the condition.
Our example’s condition is for transactions greater than or equal to $75.00 with no receipt attached. We created the policy rule (step 4) for the “Meals” expense type. As a result, we are telling F&SCM that we want this rule applied to all meal transactions over $75.00 that have no attached receipt.
7. Then, we need to define the consequences.
To do this, expand the “Do the following” drop-down menu and select one of the options. If you choose to display a message, there is a text box where you can configure the message users should receive.
For our example, we do not want users to be able to submit a report for meal expenses over $75.00 without a receipt. As a result, we chose the “Do not allow users to submit or approve and display error message” option. Additionally, we input the error message text.
8. After defining the consequence and the rule condition, click OK to save it.
You will be returned to the policy screen. If you review the Policy Rules fast tab, you should see the rule you just created.
Policies in Action – How They Function within Dynamics 365 Finance and Supply Chain Management
Now that we have walked through what policies are and how to configure them, let’s look at what users will see if they have a policy error. We will utilize the policy and policy rule created in the screenshots above.
A user creates an expense report for a $100 meal expense. The expense has no receipt attached.
When the user clicks “Submit,” they will see the screen below. This screen indicates that the user cannot submit their report due to an error. The red “X” on the expense line makes it easy to identify which expense is generating an error if you have a multi-expense report.
If the user were to click “SEE POLICY (1)” on the right side of their screen, they would see the message configured in step 7 above.
Because the rule was configured, users cannot submit this report until a receipt is attached to the expense.
Policies within F&SCM’s expense management are instrumental in automating efforts for organizational compliance. Report approvers can review and take action based on the spend of report(s), ensuring data accuracy and policy compliance.
Want to Learn More About How to Optimize and Streamline Dynamics 365 Finance and Management?
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