Employee Expense Processing in Sage ERP X3

Thoughtware Article Published: Jun 05, 2014
Cloud data

Handling employee expense reimbursements in an efficient and timely manner benefits your organization and employees. Sage ERP X3 offers comprehensive employee expense management functionality. There’s some initial setup, but once complete, day-to-day processing tasks are straightforward and intuitive.

You can elect to allow employees to enter their own expenses—subject to review and approval—after they are set up as a user and associated with a Miscellaneous Business Partner (BP). Approved expense entries are then posted, creating an open payable transaction.

Here are instructions to help you start processing employee expenses through Sage ERP X3. Remember, we’re here to help if you have questions.

Setup Procedures

1. Document Types
Go to Setup ǀ Financials ǀ Document Types and select “EXPNS” (Expense Processing). Ensure the “Open Item Management” option is checked.

2. Expense Accounts
Set up separate accounts for each expense you wish to track, such as mileage, airfare or meals. Be sure to assign to a non-operating expense classification.

Go to Common Data ǀ GL Accounting Tables ǀ General ǀ Accounts.

Also under the “Miscellaneous” tab, set the Supplier and Miscellaneous BPs to “Yes” for authorization.

3. Expense Cost Accounting Codes
We recommend defining an account code specific to expense costs for each expense group. For example, the code might be travel with the type being expense costs. To make these definitions, go to Setup ǀ Financials ǀ Accounting Interface ǀ Accounting Codes and assign the respective general ledger (GL) account.

Under the same option, set up a Miscellaneous BP accounting code for each expense group and assign a collective employee expense clearing account to the “Expense Costs” line. This accounting code line is referenced by the EXP (Refund of Expenses) automatic journal.

4. Expense Group Charge Codes
From here, assign the corresponding expense accounting code for each of your expense groups, e.g., meals or airfare. Set the valuation type to “Unitary” for all charge codes except mileage—which should be set to “Mileage.”

Go to Setup ǀ AP-AR Accounting ǀ Expenses ǀ Charge Codes.

5. Mileage Allowance
Here’s when you’ll define the reimbursement rates for mileage expenses. Set up Category One with its respective reimbursement allowance per mile. For the 2014 tax year, the IRS reimbursement rate is $0.56/mile. Set up other categories as needed.

Go to Setup ǀ AP-AR Accounting ǀ Expenses ǀ Mileage Allowances.

6. Miscellaneous BP for Each User
Here is where you’ll set up a Miscellaneous BP record for each employee and link it to a user account. On the “Accounting” tab, assign the expense accounting code to the BP. Be sure to click the “Miscellaneous BP” and “Supplier” checkboxes on the “Identity” tab.



Go to Common Data ǀ BPs ǀ BPs.

7. Supplier

Click “Supplier” on the bottom of the BPs screen or go to Common Data ǀ BPs ǀ Suppliers.


8. User Account for Expense Processing

Now, set up the A/P and A/R parameters definitions for an individual user. Start with the “Parameter Definitions” tab. Define the “EXPBPR” field to be MISC, which is the Miscellaneous BP account setup for expense processing. Right click on the “Expenses” line to make the change.

Go to Setup ǀ Users ǀ Users.

Note:  This also is where you define the mileage code and the category to use for a specific user. If none are defined, the defaults come from Setup ǀ General Parameters ǀ Parameter Values for the folder.

You’ve now completed the one-time setup required to accurately collect, track and reimburse employee expenses. Next are day-to-day processing tasks.


Routine Processing Tasks

1. Expense Report Processing

When it’s time for you—or the employee—to enter expense records:

Go to AP-AR Accounting ǀ Expenses ǀ Expense Form Entry.

First, select the employee (user) and choose the period (date range). Enter the date, expense code and quantity. For mileage, you can enter the actual number of miles traveled, and Sage ERP X3 will calculate the mileage reimbursement. For any other charge, set the quantity to one.

You also can enter the actual amount and the invoice amount plus tax (automatically calculated for mileage).

You can assign a dimension to the “Charge Code” line. Depending on how you wish to structure your dimension types, you can have one charge code and use dimensions to catalog the different elements (airfare, hotel, auto, etc.).

You also can enter a signature (authorization). This is simply a way to control the posting function. There is an option later to only post authorized expenses.

Next, enter any pertinent comments.

Note:  You may want to prevent employees from accessing this field and only grant access to managers. This can be set up using standard X3 functionality.

You can print the Employee Expense Report by clicking the printer icon on the toolbar, entering your selection criteria and clicking “Print.”

2. Expense Report Posting

When you’re ready to post employee expense reports:

Go to AP-AR Accounting ǀ Expenses ǀ Expense Posting.

Expenses are posted based on the criteria you define, such as for a specific employee or period. Select “Entry Type EXPNS.” If you only want to post expense lines with an approval signature, select “Authorized Expense Lines.”

3. Check Printing

Employee expense check production is no different than printing a check for a supplier. You have the option to select only Miscellaneous BPs in the selection criteria in AP Payment Proposal Processing.

You’re good to go!

Don’t be discouraged by the lengthy set of instructions. Once you complete the one-time setup process, employee expense processing is virtually identical to payment processing for any of your company’s BPs.

Please contact us with any questions.

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