4Expense Reimbursements

This chapter contains the following:

The payment options your company chooses determines the reimbursement processes to run and the payment requests that are created. To reimburse card issuers and employees for business expenses, the expense auditor runs the Process Expense Reimbursement process and the corporate card administrator runs the process, Create Corporate Card Issuer Payment Requests. Payment requests are created in Oracle Fusion Payables, after which corporate card issuers and employees are paid by Oracle Fusion Payments.

The following figure illustrates the flow of data when the expense auditor runs the process named Process Expense Reimbursement.

This figure illustrates the flow of data when the expense
auditor runs the process named Process Expense Reimbursement.

Settings That Affect Expense Report Payment Requests

Settings that affect expense report payment requests for Both Pay transactions:

  • Employee Liability Account: Set up as a system option on the Edit Expenses System Options page

    Note: This account is used only if there are cash expenses in the expense report and reimbursement is due to the employee.
  • Corporate Card Issuer Payment Liability Account: Set up in Payables

  • Expense Clearing Account and Payment Option: Set up in the Create Company Account dialog box

How Expense Report Payment Requests Are Processed

After expense report approval is complete, expense reports are ready for reimbursement. The following processing must occur:

  • Process expense reports containing Both Pay corporate card transactions.

  • Run the Process Expense Reimbursement program.

If the payment option is Both Pay, expense reports that contain corporate card transactions require additional processing.

Process Expense Reports Containing Both Pay Corporate Card Transactions

When the expense report approval process is complete, Both Pay expense reports are automatically processed. The Both Pay processing creates corporate card issuer expense reports to pay the card issuers. All Both Pay corporate card transactions in the expense report are copied into a new expense report to which the report number is appended with a .1. If corporate card transactions exist for more than one card in the report, a new expense report is created that is appended as .1, .2.

The following information from the original expense report isn't copied into the corporate card issuer expense report:

  • Project and task information

  • Tax classification codes

  • Accounting distributions

The accounting distributions for the corporate card issuer expense report are created against the expense clearing account defined for the company accounts of the corporate card transactions. The original expense report and the newly created corporate card issuer expense report are now ready for reimbursement processing.

Run the Process Expense Reimbursement Program

Expense auditors run the Process Expense Reimbursement program to process expense reports and to create payment requests in Payables. This process includes the following actions:

  • Populates Payables Open Invoice Interface tables.

  • Creates employee and corporate card issuer payment requests.

  • Handles processed and rejected expense reports.

The Process Expense Reimbursement program selects all expense reports that are ready for reimbursement and creates header and line records for each report in the Open Invoice Interface tables. Only business expenses are eligible for reimbursement to the employee and they're categorized as Business or Business - Employee Paid.

Note: If a payee doesn't exist for an employee who needs to be reimbursed, the application creates a payee in Payments.

Each expense report has one corresponding header record in the Open Invoice Interface tables. A child line is created in the interface table for each expense item eligible for reimbursement with the following information:

For expense reports containing Both Pay and Company Pay transactions, the reimbursement process creates reversal lines in the Open Invoice Interface tables so the employee invoice can derive the net amount due to the employee.

After populating the Open Invoice Interface tables, the Process Expense Reimbursement program invokes the Import Payables Invoices process in Payables. Payables creates payment requests using the information in the Open Invoice Interface tables. When there is no accounting distribution for a line item in the Open Invoice Interface tables, Payables creates accounting distributions using the distributions from Expenses. Payables then invokes Oracle Fusion Tax to calculate tax for the expense lines with tax classification codes.

During payment request creation, Payables rejects records in the Open Invoice Interface tables if errors occur. Examples of errors are dates in closed accounting periods or invalid payment methods. The Process Expense Reimbursement program removes rejected records from the interface table and updates the status of the expense reports to Payables Rejected. Whenever the Process Expense Reimbursement program runs, it selects all the Payables Rejected expense reports for reprocessing. The expense auditor then reprocesses the remaining expense reports for reimbursement.

All expense reports, for which payment requests are created, are updated with a payment request identifier. After payment requests are created, they remain in a Never Validated status until the invoice validation process is run in Payables. After validation, payment requests are processed in Payments.

The following table describes the payment options for corporate card transactions in expense reports and the reimbursement processes that are run to generate payment requests.

Note: When a report contains cash expenses only, the Process Expense Reimbursement process creates an employee payment request, rather than a card issuer payment request.
Payment Options in Expense Reports for Corporate Card Transactions Reimbursement Processes to Run Payment Requests Created

Process Expense Reimbursements

Employee Payment Requests

Individual Pay Only

Process Expense Reimbursements

Employee Payment Requests

  • Cash

  • Both Pay

Process Expense Reimbursements

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

Both Pay Only

Process Expense Reimbursements

Corporate Card Issuer Payment Requests

  • Cash

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Individual Pay

  • Both Pay

Process Expense Reimbursements

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Cash

  • Individual Pay

  • Both Pay

Process Expense Reimbursements

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Individual Pay

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Cash

  • Individual Pay

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Both Pay

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

Corporate Card Issuer Payment Requests

  • Cash

  • Both Pay

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

  • Individual Pay

  • Both Pay

  • Company Pay

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

  • Employee Payment Requests

  • Corporate Card Issuer Payment Requests

Company Pay Only

  • Process Expense Reimbursements

  • Create Corporate Card Issuer Payment Requests

Corporate Card Issuer Payment Requests

Expense Report Rejection Reasons

An expense report rejection occurs when expense reports don't pass validation. When you submit an expense report for reimbursement, the reimbursement process creates:

  • Payment requests for employees

  • Invoices for contingent workers

During payment request or invoice creation, expense reports that don't pass validation are rejected and a document payable isn't created. When this happens, the expense auditor is presented with a rejection reason. After corrective action is taken, the expense auditor reruns the Process Expense Reimbursements and Cash Advances process. Prompt attention to rejection reasons result in timely reimbursement.

Types of expense report rejections include:

  • Payment request rejections

  • Invoice rejections

Payment Request Rejections

The following table lists rejection codes, describes payment request rejection reasons, and states the corrective action to take.

Rejection Code Rejection Reason Corrective Action

INACTIVE_PERSON

Employee is inactive.

On the Manage Expenses System Options page, increase the number of days allowed after termination.

CREATE_PAYEE_FAILED

Application failed to create a payee.

Run the process with diagnostics turned on.

Review the log file.

ACCT DATE NOT IN OPEN PD

Accounting date isn't in an open period or can't be derived.

If the accounting date is in a closed period, the process advances the items to the next open period.

Ensure that at least one open accounting period exists.

INVALID DISTRIBUTION ACCT

Accounting code combination is invalid.

Verify whether any of the following rejection reasons caused the error and update accordingly:

  1. Code combination ID is invalid.

  2. Distribution account segments are invalid.

  3. Distribution account isn't enabled or is inactive.

  4. Code combination ID isn't present in the general ledger.

DOC CAT NOT REQD

Document sequencing isn't enabled, but the Document Category Code field is populated.

Enable document sequencing in your payables application.

DUPLICATE INVOICE NUMBER

Invoice number isn't unique.

Verify from the AP_INVOICES table or from the AP_HISTORY_INVOICES table whether an invoice with a similar number exists for the same business unit.

Correct data.

INVALID PAY CURR CODE

Payment currency is invalid.

Verify the payment currency in accounts payables.

Correct data if required.

INVALID DOC CATEGORY

Document category code is invalid.

The seeded document category code is populated on the invoice header and isn't synchronized with the invoice type.

Ensure that the document category is the same as the invoice type.

INVALID CURRENCY CODE

Currency is invalid.

Ensure that the currency is valid in your payables application.

Correct data if required.

NO EXCHANGE RATE

Rate type is User and conversion rate isn't present or the rate type is Non-User and the rate isn't defined.

Verify that a conversion rate exists in the general ledger for the given rate type.

Correct data if required.

INVALID LINE TYPE LOOKUP

Line type lookup value is invalid.

Ensure that the line type is valid.

INVALID EXCH RATE TYPE

Conversion rate type is invalid.

Verify that the currency and the ledger currency include a valid conversion rate type.

Verify the conversion rate type on the Currency Rates Manager page, Rate Types tab in Setup and Maintenance, Manage Historical Rates task. Check whether the conversion rate type value is valid.

Make corrections if required.

OVERRIDE DISALLOWED

Document category code is populated on the invoice header when the Allow document category override option isn't enabled.

Review the Allow document category override option on the Manage Invoice Options page in Setup and Maintenance.

Update if required.

PAY X RATE NOT FIXED

Payment currency isn't equal to currency and the fixed rate doesn't exist.

Verify the existence of the conversion rate.

Create a conversion rate if required.

INVALID PAY METHOD

Payment method for the installment is invalid.

Verify the existence of the payment method for the installment.

Create a payment method for the installment or assign one if required.

NO TERMS INFO

Terms information isn't provided on the interface and it can't be derived from the PO, receipt, supplier, or invoice options level.

Ensure that terms information is populated or define the terms defaulting rule.

Invoice Rejections

The following table lists rejection codes, describes invoice rejection reasons, and states the corrective action to take.

Rejection Code Rejection Reason Corrective Action

INVALID_VENDOR

Supplier is invalid.

Verify that the suppler that is set up in your procurement application passes validation.

Make data corrections if required.

DUPLICATE_VENDOR

Supplier isn't unique.

Verify that the suppler that is set up in your procurement application is unique.

Make data corrections if required.

INVALID_VENDOR_SITE

Supplier site is invalid.

Verify that the suppler site that is set up in your procurement application passes validation.

Make data corrections if required.

How Third-Party Expense Reimbursements Are Processed

Expense reports can be reimbursed through Oracle Fusion Payables or any legacy or third-party application. If you want to issue expense reimbursements through a legacy or third-party application, you can use the third-party expense reimbursement process.

Settings That Affect Third-Party Expense Reimbursements

On the Manage Expenses System Options page, you can use the Pay Expense Reports Through option to choose one of the following for expense reimbursement:

  • Payables

  • Third-party application

A third-party application may be a legacy application within your company or an outside supplier.

How Third-Party Expense Reimbursements Are Processed

The following diagram illustrates the export of expense report data from Oracle Fusion Expenses to a legacy or third-party application, the issuance of reimbursement payments by the legacy or third-party application, and the import of reimbursement payment data back to Expenses.

The following figure illustrates the export of expense report data from Oracle Fusion Expenses to a legacy or third-party application, the issuance of reimbursement payments by the legacy or third-party application, and the import of reimbursement payment data back to Expenses.

This figure illustrates the export of expense report
data from Oracle Fusion Expenses to a legacy or third-party application,
the issuance of reimbursement payments by the legacy or third-party
application, and the import of reimbursement payment data back to
Expenses.

The following table describes the flow of expense report data when you use a legacy or third-party expense report reimbursement application.

Sequence Action Result

1.

In Expenses, employees create expense reports, which are approved, and audited.

Expense reports are eligible for reimbursement.

2.

In Expenses, you can schedule the following processes to automatically export the expense report data from Expenses to your legacy or third-party application in .xml format:

  • Process Expense Reimbursements and Cash Advances

  • Create Card Issuer Invoices

The exported expense report data files contain all the information necessary to issue payments and record accounting entries in your legacy or third-party application. The Expenses processes automatically export expense report data from Expenses to the following locations:

  • Universal Content ManagerNavigator > Tools > File Import and Export link.

  • Search Results section on the Scheduled Processes page: Navigator > Tools > Scheduled Processes.

UCM facilitates easy tracking and download of expense report data files.

3.

From the fin/expenses/export directory, you can download the expense report data files in .xml format and transfer them to your legacy or third-party application.

Your legacy or third-party application processes the expense report data files.

4.

Your legacy or third-party application issues expense report reimbursement payments to:

  • Employees

  • Credit card issuers

Employees and credit card issuers receive payments.

5

To transfer reimbursement payment data from your legacy or third-party application, you upload your expense report reimbursement data to the fin/expenses/import directory.

Expense report reimbursement information transfers from the legacy or third-party application back to Expenses in a specific .xml format with a .txt or .xml extension.

The specific .xml format depends on the expense report payment option selected by your company for corporate card transactions and whether the data file is for cash advances.

6

From Expenses, you schedule the Update Expense Report Status process.

The Update Expense Report Status process automatically:

  • Updates the expense reports in Expenses as paid

  • Provides legacy or third-party reimbursement references in the paid expense reports

Expense Report Data Flow Using a Third-Party Application

If you use a legacy or third-party application to process expense report reimbursements, you can export expense report XML data files from Oracle Fusion Expenses and use them to process data in your legacy or third-party application. After your legacy or third-party application processes reimbursement payments, you can import the reimbursement payment XML data files back to Expenses.

Expense Report XML Data Exported to Universal Content Manager

To create expense report XML data files for export to a legacy or third-party application, schedule the following automatic processes in Expenses using Navigator > Tools > Scheduled Processes:

  • Process Expense Reimbursements and Cash Advances

  • Create Card Issuer Invoices

The resulting XML expense report data files are available from the Search Results section on the Scheduled Processes page or you can download them from Universal Content Manager (UCM) at fin/expenses/export directory using Navigator > Tools > File Import and Export link.

The following figure shows an example of an expense report XML data file format that is automatically created when an expense report containing cash expense items is processed by the Process Expense Reimbursements and Cash Advances process.

This figure shows an example of an expense report
XML data file format that is automatically created when an expense
report containing cash expense items is processed by the Process Expense
Reimbursements and Cash Advances process.
Note: Expense report data files that contain corporate card expenses for Company Pay or Both Pay payment options have a different XML format structure than the preceding example. Similarly, expense report data files for cash advances also contain a different XML format structure.

Expense Report Reimbursement XML Data Imported Into Universal Content Manager

To transfer expense report reimbursement data from a legacy or third-party application back to Expenses, the data must appear in XML format. Upload the correctly formatted XML reimbursement payment data files to UCM at fin/expenses/import directory.

Tip: For optimal file handling, the best practice is to use the following naming convention for reimbursement payment data files: MM-DD-YYYY HH-MM ExmPaymentExtract.
Caution: The XML files you upload to UCM must be in precisely the same structure as shown in the following figure.
This figure shows the precise XML file format structure
that you must use to import expense report data into Universal Content
Manager.