How’s the default expense type derived?

During expense creation, Expenses Agent suggests an expense type to reduce manual entry and help improve accuracy. The suggestion is based on available expense information, previous selections, business unit-wide usage, and expense setup.

The way the default expense type is determined depends on the expense source:

• Uploaded receipts
• E-receipts
• Corporate card transactions

In each case, the application evaluates available transaction details along with existing setup configurations to determine the most appropriate expense type.

Best Practices

• Define expense types that are clear, meaningful, and distinct. Add helpful descriptions so the agent can distinguish between similar expenses, for example, an employee meal versus a meal with a customer.
• Provide a clear expense description, such as “hotel accommodation for customer visit” or “taxi to airport,” to improve the suggested expense type.

Uploaded Receipts and E-Receipts

The following process applies to uploaded receipts and e-receipts. The exact process depends on whether your organization uses an agent-assisted expense flow. In all cases, you can review and change the suggested expense type before submitting the expense.

Derivation Logic

1. Information provided with the expense

   When a message includes an expense type or other helpful details, the agent uses that information to suggest an expense type.

   For example, if a user includes the instruction “Use Training as the expense type for this conference fee” in an email, the agent suggests the Training expense type.

   If an expense template is included, the agent also considers it together with the expense details.

2. Expense details and agent recommendation

   In agent-assisted flows, the agent reviews available expense details to recommend the best matching expense type.

   The agent can use:

   • Merchant
   • Expense category (such as Meals or Accommodation)
   • Expense description
   • Expense template information

   For example, based on the user’s message, available expense details, and configured expense type descriptions, “Dinner with a customer” may be classified as Meals with Customer, while “Taking a customer to a baseball game” may be classified as Entertainment.

   Additional receipt details can help distinguish between similar miscellaneous expenses, such as taxi, parking, and toll expenses.

   If no template is provided and the selected expense type is available in more than one template, the default template is used to determine which template to apply.

3. Previous expense choices

   The application checks the employee’s past expenses for the same combination of merchant and receipt type.

   If found, it selects the most frequently used expense type.

   If there’s a tie, the most recently used expense type is selected.

   For example, if an employee usually categorizes Starbucks expenses as Meals, Expenses Agent suggests Meals for future expenses from the same merchant.

4. Business unit history

   If no match is found in the employee’s history, the application checks usage within the employee’s business unit using the same logic (frequency, then recency).

   For example, if most employees in the business unit categorize a merchant as Office Supplies, Expenses Agent suggests Office Supplies.

5. Review required

   If the agent can’t determine an appropriate expense type using the available information, previous expense choices, or business unit history, the expense type is shown as Unknown so you can review and select the appropriate value.

Without Agent Assistance

For organizations that don’t use agent-assisted expense creation, Oracle Expenses suggests an expense type using:

• Available expense details
• Previous expense choices
• Business unit history
• Default expense type setup

If no suitable match is found, the expense type is shown as Unknown so you can review and update it before submission.

Corporate Card Transactions

For corporate card transactions, expense type derivation is based on predefined mapping rules.

Derivation Logic

1. Card expense type mapping

   The application derives a card expense type using the transaction source mapping rule assigned to the corporate card program.

   Mapping is based on either:
   • Merchant Category Code (MCC)
   • Standard Industrial Classification (SIC) code

   If a matching MCC/SIC code is found, the corresponding card expense type is used.

   If no match is found, the default card expense type defined in the mapping rule is used.

2. Mapping to expense type

   The application identifies the default template for the employee’s business unit.

   It then looks for an expense type mapped to the derived card expense type. If found, that expense type is used. If not, the default expense type is applied.