6Spend Authorizations

This chapter contains the following:

A spend authorization is a request by an employee for approval of estimated expenses for a future activity. A spend authorization request proceeds through the following process, which the employee initiates:

  • Employee submits a spend authorization request

  • Manager approves the spend authorization request

  • Employee submits an expense report

Employee Submits a Spend Authorization Request

The process for a spend authorization begins when an employee requests authorization for future expenses. The employee completes the Request Authorization page by clicking the Authorizations infotile on the Oracle Expenses work area. Expenses tracks all requests by an employee for authorization of future expenses.

Manager Approves the Spend Authorization Request

The employee submits the spend authorization request to his manager for approval. If the manager rejects the request or requests more information, Expenses returns the request to the employee who takes appropriate action.

Employee Submits an Expense Report

After incurring business expenses, the employee creates and submits an expense report to his manager for approval. When an approved spend authorization request exists, the employer may require the employee to attach it to the expense report at either the expense report header or at the lines.

Attaching the spend authorization to the expense report allows managers and expense auditors to compare approved estimated expenses against incurred expenses. If budgetary control is enabled, the employee may be alerted when he makes expense report entries that are contrary to a previous authorization. Such violations are visible to the manager and the expense auditor.

How You Configure Spend Authorization Request Approval Rules

You can configure approval rules for approval of spend authorization requests. Oracle Business Process Management Suite (BPM) provides the UI to administer and manage approval rules. A BPM Worklist administrator can access approval rules in the BPM Worklist if he is assigned the role of Financial Application Administrator (FUN_FINANCIAL_APPLICATION_ADMINISTRATOR).

When you submit a spend authorization request for approval, Expenses invokes the approval process. The approval process prompts a set of approval rules created in the BPM Worklist to build the list of approvers. After an approver responds to an approval notification, BPM sends an approval notification to the next approver. BPM continues sending approval notifications to the approvers in the approval hierarchy until all approvals are complete.

To configure or modify spend authorization rules, complete these steps:

  1. In the Setup and Maintenance work area, use the following to navigate to the BPM Worklist:

    • Offering: Financials

    • Functional Area: Expenses

    • Task: Manage Expense Approval Rules

  2. In the BPM Worklist, select the Task Configuration tab.

  3. From the Tasks to be configured pane, select FinExmWorkflowSpendAuthorization.

  4. Select the Assignees tab.

  5. Click the Switch to Vertical Layout link. An approval hierarchy displays.

  6. On the Authorization rectangle, click the diamond icon and select Go to rule.

The spend authorization approval flow contains a predefined rule set with its associated approvers as described in the following table.

Rule Set Approver

SpendAuthorizationRuleSet

  • SpendAuthorizationManagerRule

Supervisor

  • Approval rule with one level of supervisory hierarchy

SpendAuthorizationRuleSet: Approval by Supervisor

The predefined rule set for approval of spend authorization that uses the supervisory hierarchy is called SpendAuthorizationRuleSet. The predefined rule is as follows:

Approval by the immediate supervisor of spend authorizations with a total over 0

You can change the predefined rules, delete, or add rules as needed. The following table lists the parameters for the SpendAuthorizationRuleSet.

Rule Field Predefined Value Description

SpendAuthorizationMan-agerApprovalRule

Condition

AuthorizedTotal is same or greater than 0

Attribute that stores the spend authorization request total in the reimbursement currency.

 

List Builder

Supervisory

The rule uses the supervisory hierarchy to retrieve approvers.

Response Type

Required

The approval notification requires a response.

Number of levels

1

Number of supervisory levels required for approval completion.

Starting Participant

HierarchyBuilder.getManager ("supervisory",Task.payload .ownerUserName,-1,"","")

Person for whom the spend authorization is requested.

Top Participant

HierarchyBuilder.getPrincipa l("FINUSER30",-1,"","")

Last approver in the approval chain. Approval doesn't go beyond this participant in a hierarchy. To use this rule as is, you must change the predefined last approver user name to the last approver in your organization.

Note: This must be changed to reflect the last approver in your organization.

Auto Action Enabled

False

Automatic approval action is disabled.

Auto Action

Null

No automatic approval action.

Rule Name

SpendAuthorizationManagerRule

Name of rule.

A spend authorization is a request by an employee for approval of estimated expenses for a future activity. For example, if an employee plans a business trip, he or she can request approval for anticipated expenses before taking the trip.

When you set up spend authorizations, you can consider these options:

  • Enable spend authorizations

  • Specify attachment location of spend authorizations

  • Define spend authorization behavior

  • Specify spend authorization numbering

  • Control visibility of spend authorizations

  • Enable budgetary control

You can set up spend authorizations for all business units in your organization or you can create exceptions for specific business units.

Note: Before you start, you must first select a business unit in Oracle Expenses on the Authorizations tab of the Edit Specific Business Unit dialog box. Doing this enables budgetary control to validate anticipated expenses against a specific budget, ledger, and business unit.

Enable Spend Authorizations

In the Setup and Maintenance work area, use:

  • Offering: Financials

  • Functional Area: Expenses

  • Task: Manage Cash Advance and Authorization Policies

To enable spend authorizations on the Manage Cash Advance and Authorization Policies page, select Yes from the Enable Authorizations choice list.

Specify Attachment Location

You can allow employees to attach an approved spend authorization at the expense report header level or at the expense line level.

To specify the attachment location of spend authorizations on expense reports, from the Attach Authorization choice list, select Header Only, Lines Only, or No.

Note: The Header Only option is only applicable when budgetary control isn't enabled.

Define Spend Authorization Behavior

Depending on your business needs, you can specify the attachment of a spend authorization to an expense report as optional or required. From the Behavior choice list, select Optional or Required.

Specify Spend Authorization Numbering

You can optionally specify alphanumeric prefixes for spend authorization identification numbers.

To specify a prefix such as SA, that stands for Spend Authorization, enter a value in the Prefix field.

Control Visibility of Spend Authorizations

Approved spend authorizations are visible in the Expenses work area or from the authorization selection choice list for the number of days you specify in the Visibility in Days field. The default value is 180 days. You can either increase or decrease the number of days by one or you can enter any positive whole number directly.

Check or Reserve Funds

Depending on your business requirements, you can choose to only check funds or to reserve funds by selecting the Check funds or Reserve funds option. If you select Check funds, you can decide whether to present a warning to employees if funds are insufficient to cover an estimated expense. The warning options are Yes or No.

The Display Warning to User option is applicable only when you select the Check funds option.

Enable Budgetary Control

If you want to check funds to determine whether sufficient funds are available for estimated expenses, you must enable budgetary control. To enable budgetary control in the Setup and Maintenance work area, use:

  • Offering: Financials

  • Functional Area: Budgetary Control and Encumbrance Accounting

  • Task: Manage Budgetary Control

Complete these steps:

  1. On the Manage Budgetary Control page, click the applicable business unit.

  2. On the Edit Budgetary Control and Encumbrance Accounting page near Budgetary Control, select the Enable check box.

  3. Select Yes from the Enabled choice list for the business function, Expense Management.

  4. Click the corresponding Transaction Type Details icon and enable the transaction subtype of Spend authorization expense item for the transaction type of Spend authorization by selecting Yes.

  5. From the Enabled choice list for the business function, Payables Invoicing, select Yes.

  6. Click the corresponding Transaction Type Details icon and enable the transaction subtype of Spend authorization payment request for the transaction type of Invoice by selecting Yes.

In this example, you request a spend authorization for an upcoming trip. After you return from the trip, you will create an expense report and attach the approved spend authorization lines to their respective expense items in the report.

This topic show you how to:

  • Create a spend authorization.

  • Approve the spend authorization.

  • Create an expense report and attach authorization lines.

  • Submit the expense report.

Create a Spend Authorization

To create a spend authorization, complete these steps:

  1. Sign in as an employee.

  2. Click the House icon

  3. On the Home page, click Me > Expenses > Travel and Expenses work area.

  4. In the Travel and Expenses work area, click the Actions menu.

  5. Select the Request Authorization option.

  6. On the Request Authorization page in the Purpose field, enter Oracle Open World.

  7. From the Expense Location choice list, search and select United States.

  8. From the State Date field, enter a date one month from today's date.

  9. From the End Date field, enter a date that is four days after the Start Date.

  10. Click the Create icon near the Estimated Expenses section.

  11. On the Estimate Expense page from the Template choice list, select Travel.

  12. From the Type choice list, select Airfare.

  13. From the Amount choice list, select USD.

  14. In the field near the Amount choice list, enter 650.00.

  15. In the Description field, enter Airfare to Oracle Open Word.

  16. Click Save and Create Another.

  17. On the Estimate Expense page from the Template choice list, select Travel.

  18. From the Type choice list, select Meals.

  19. From the Amount choice list, select USD.

  20. In the field near the Amount field, enter 375.00.

  21. In the Description field, enter Meals at Oracle Open World.

  22. Click Save and Create Another.

  23. On the Estimate Expense page from the Template choice list, select Travel.

  24. From the Type choice list, select Hotel.

  25. From the Amount choice list, select USD.

  26. In the field near the Amount choice list, enter 800.00.

  27. In the Description field, enter Accommodations at Oracle Open World.

  28. Click Save and Close.

  29. On the Authorization page, click Submit.

Approve the Spend Authorization

To approve the spend authorization as the manager, complete these steps:
  1. Sign out as an employee.

  2. Sign in as a manager.

  3. On the springboard, click the Bell icon.

  4. From the Notifications choice list, select Pending Notifications.

  5. Locate the spend authorization you just created and click the Action Required: Authorization Approval link.

  6. On the approval form for the spend authorization, click Approve.

  7. In the Approve dialog box, enter the following in the Comment field: I approve this spend authorization request for the trip to Oracle Open World.

  8. Click Submit.

  9. Click Approve.

  10. Sign out as a manager.

  11. Sign in as an employee.

  12. In the Travel and Expenses work area, click the Authorizations infotile.

  13. Click the Approved link on the Authorizations infotile.

Create an Expense Report and Attach Authorization Lines

To create the expense report and attach authorization lines to the expense items, complete these steps:
  1. In the Travel and Expenses work area, click the Expense Reports infotile.

  2. Click the Create icon.

  3. On the Create Expense Report page in the Purpose field, enter Attended Oracle Open World.

  4. Click Save.

  5. Click Create Item near the Expense Items section.

  6. On the Create Expense Item page from the Template choice list, select Travel.

  7. From the Type choice list, select Airfare.

  8. From the Expense Location choice list, search and select United States.

  9. Click OK.

  10. From the Amount choice list, select USD.

  11. In the field near the Amount choice list, enter 650.00.

  12. In the Description field, enter Airfare to Oracle Open World.

  13. Click the Attach icon near Authorization.

  14. In the Select Estimated Expense dialog box from the Authorization choice list, select the authorization you created.

  15. Select the Airfare authorization line.

  16. Click the OK.

  17. On the Create Expense Item page, click Create Another.

  18. On the Create Expense Item page from the Template choice list, select Travel.

  19. From the Type choice list, select Meals.

  20. From the Expense Location choice list, search and select United States.

  21. From the Amount choice list, select USD.

  22. In the field near the Amount choice list, enter 110.00.

  23. In the Description field, enter Meals at Oracle Open World.

  24. Click the Attach icon near Authorization.

  25. In the Select Estimated Expense dialog box from the Authorization choice list, select the authorization you created.

  26. Select the Meals authorization line.

  27. Click OK.

  28. On the Create Expense Item page, click Create Another.

  29. On the Create Expense Item page from the Template choice list, select Travel.

  30. From the Type choice list, select Hotel.

  31. From the Expense Location choice list, select United States.

  32. From the Amount choice list, select USD.

  33. In the field near the Amount choice list, enter 800.00.

  34. In the Description field, enter Hotel stay at Oracle Open World.

  35. In the Itemization section, enter these values:

    Field Name Entry

    Type choice list

    Room Charge

    Daily Amount

    200.00

    Days

    4

    Amount

    800.00

  36. In the Itemization section, click the Attachment icon near Authorization.

  37. On the Select Estimated Expense dialog box from the Authorization choice list, select the authorization you created.

  38. Select the Hotel authorization line.

  39. Click OK.

  40. Click Save and Close.

Submit the Expense Report

  1. On the Expense Report page, select the I have read and accept the corporate travel and expense policies check box.

  2. Click Submit.

  3. In the warning that indicates one or more required imaged receipts are not attached, click Yes.

How Budgetary Control and Spend Authorizations Work Together

If your organization requires the ability to track and control expenditures against a budget, you can enable Oracle Budgetary Control. This is especially helpful for public sector and commercial organizations that require:

  • Visibility into budget commitments and expenditures

  • Adherence to legal requirements

  • Control of excessive spending

  • Approval of anticipated expenses

  • Validation of anticipated expenses against a specific budget for an applicable ledger and business unit

To support this requirement, Expenses integrates with Budgetary Control. The process begins when an employee creates and submits a spend authorization for approval. The approving manager checks whether funds are available against the budget and optionally views the results. When the manager approves the spend authorization, funds are automatically reserved. After the employee incurs expenses, he or she creates an expense report and attaches the approved spend authorization estimated lines to it. After the manager approves the expense report, it's processed for reimbursement, which results in a payment request. The payment request generates an invoice, which is validated, and subsequently the employee or the card issuer is paid.

This diagram shows how the spend authorization and the budgetary control process work together to control excessive spending.

This diagram shows how the spend authorization
and the budgetary control process work together to control excessive
spending.

Effects of Enabling Budgetary Control

When your company enables budgetary control, these actions are available:

  • When an employee submits a spend authorization for approval, Budgetary Control evaluates whether funds are available for the anticipated expenses for a specific business unit, ledger, and budget date.

  • The status of the funds check is visible to the approving manager.

  • The approving manager can recheck funds and view results directly from the authorization approval notification.

  • After the manager approves a spend authorization, funds are reserved automatically.

  • After the employee incurs expenses, he or she can associate the approved spend authorization with the actual expenses and submit the expense report for approval.