Exploring the Supplemental Configurations

Receipts are important for all businesses in all countries, but they become extra important when VAT is involved. As you've seen in previous lessons, the type of receipt the user provides can impact the amount of money you can reclaim. If the user has the wrong receipt, your company effectively loses that money.

Receipt Handling is the tool used to configure a number of aspects around receipts, and your users must work with receipts for their expense reports. This section will cover some areas of the Receipt Handling tool that can impact VAT.

Receipt Limits

When operating in countries that levy VAT, it's always a good idea to periodically review your Receipt Limit configurations for each group. You'll want to make sure you have the conditions set up to make sure your users are providing the right receipts based on expense types, monetary limits, and other requirements based on your company's guidelines and any statutory guidelines mandated by a government body. Most countries will want receipts for nearly all business-related expenses regardless of the amount for proper VAT reclaim.

Receipt Type

When you are configuring Receipt Limits, you're not only defining what types of expenses require a receipt, you're also defining what type of receipt (original paper or image) the user must provide. Make sure you set up your Receipt Limits with the proper Receipt Type to satisfy the requirements of the appropriate Tax Authority that processes your reclaim, as well as your own internal requirements. There are three options you can select:

• Original Paper: This option means the user must supply the original, hard copy receipt for this expense and not an image. The SAP Concur system has features to help, but it's up to you to implement a process to collect those receipts from your users.
• Image: This option means the user must provide a valid image of the receipt for this expense and not the original paper.
• Both: The user must provide both the original copy and an image.

In the Receipt Handling area, there's a tab called Receipt Imaging. The configurations here define settings related to the options the user has for attaching images. Groupings of these settings apply at the Policy level. One of these settings is called Mark Receipts Received?, and it controls what happens to key system statuses when a user attaches a receipt image.

As you saw in the previous section, users may be required to provide you an image, original paper, or both forms of their receipt. This means that the system has to be able to track what type of receipt the user is required to provide and what type of receipt they provided.

The types of receipt the user must provide for each transaction is controlled in the Receipt Limits area of the configuration. The type of receipt the user did provide is controlled in a number of different places. The one we are concerned about now is the previously mentioned Mark Receipts Received? setting.

If that setting is activated, it tells the system that the user has also provided a paper receipt when they attach their image. If the setting is not activated, it tells the system that the user has not provided a paper receipt when they attach their image. Most sites have two prebuilt options; one with the setting activated and another with it non activated. If your users are required to provide paper receipts, it's best practice to use the Mark Receipt Received = No option on your Policy.

This one is pretty simple; the Expense Entry Forms used for VAT should include the following two fields and those fields should be set to be required:

• City of Purchase: This field not only lets the user indicate where a purchase was made (something you might want for reporting reasons) but is also used by the system to determine if the expense took place in the user's home country, which in turn is used to determine if the VAT was domestic or non-domestic. If this field is not populated, the system will not calculate VAT.

  Depending on the expense type, the label of this field might be different: Location, City, City of Departure, and City of Arrival are some examples.

• Receipt Status: As you've already seen in previous lessons, this field is critical to VAT configurations and the determination of how much you can reclaim. If this field is not populated, the system will still calculate the VAT, but it will not calculate reclaim.

In some cases, the system needs specific information to calculate the correct tax or reclaim amount. For example, the tax rate in German for taxi and public transportation expenses depends on the length and location of the trip: domestic trips over 50km are taxed at the standard rate, while domestic trips under 50km are taxed at the reduced rate and foreign trips are exempt from tax. For this to work correctly, users need a way to indicate the nature of their trip when adding these expenses.

This is done by using Tax Forms. These forms are created in Forms and Fields and applied in Tax Administration.

Let's review this configuration for German transportation expenses.

You've already seen that within the tax configuration tools, Tax & Reclaim Groups control how taxes and reclaim are defined for each expense type. The expense types available to a user are configured at the Policy level (see the following image). You'll want to make sure that each expense type that is active for a specific policy is also part of a Tax & Reclaim Group for the proper countries. Inconsistencies can mean you are missing out on critical reclaim and in some cases break your financial integration.

Furthermore, the entry form used to capture data about each expense type is controlled at the Policy level as well. Make sure that each form used by each expense type on each policy is capturing the information necessary to calculate tax and reclaim, in particular the City of Purchase and Receipt Status fields, as discussed in the previous section.

On the left, you can review the Policy Status column to see which expense types are active and inactive for a Policy. There are Activate and Deactivate buttons available to change their current status.

The Expense Entry Form column indicates what form will be used to capture the details of each expense. Make sure that you use a form that has the necessary fields.

Users who live in countries that levy VAT tend to itemize their expenses more often than users who don't. The reason is that one receipt, and, therefore, one expense entry, can include items that are taxed at different rates. For example, an expense at a restaurant might include the food eaten, alcoholic beverages, non-alcoholic beverages, a takeout order, and a gratuity all on one bill. All of those items may be taxed differently, requiring that expense to be itemized on an expense report.

Since itemization is more common, you should make sure that you study the following settings carefully to ensure that your system can calculate your taxes and reclaim them properly. These settings apply to all policies, regardless of country and VAT configuration.

In the following section, learn more about the itemization settings for each expense type.

Available for

This setting controls when an expense type is available to be selected by a user and added to an expense report. There are three choices:

• Both Entry and Itemization: The expense type is always available to be selected. Most expense types fall into this category.
• Only for Entry: The expense type can only be selected as a normal entry on an expense report or the parent in an itemization. It cannot be a child in an itemization. Cash Advance Return and Currency Gain/Loss often fall into this category.
• Only for Itemization: The opposite of the Only for Entry option. It can only be a child in an itemization. It cannot be a normal entry or a parent in an expense report. Hotel Tax and Alcoholic Beverages often fall into this category.

Itemization

This setting lets you control which expense types can and can't be itemized by a user. There are three options:

• Required: The expense type must always be itemized. This is very common for Hotel expenses.
• Optional: The expense type can be itemized by the user if they have a need to. This is the most common option and applies to most expense types.
• Not Allowed: The expense type can never be itemized. This is common for mileage related expenses.

Itemization Wizard

For non-hotel expense types that your users need to itemize frequently, an Itemization Wizard is a great option to make sure they itemize the expense correctly. These wizards let you control what expense types are available or required for itemization, as well as controlling how the personal expense checkbox behaves for each expense type during the itemization process. New wizards are configured on the Itemization Wizard tab.

Expense Types Available for Itemization

This option lets you choose which expense types are available to be a child in an itemization when the user opts to itemize an expense on their expense report. The option lets you control itemization relationships to reduce incorrect itemizations. For example, you can stop someone from itemizing a meal expense to include airline fees.

There are a number of settings on the main screen used during Policy configuration. One of those settings refers back to the Receipt Imaging Settings configuration described previously in this lesson. In that section, you learned that there's a setting called Mark Receipts Received?. Activating this setting tells the system to indicate paper receipts have been received when the user attaches their images. You also learned that it is recommended to have at least two configurations under Receipt Imagine Settings; one with the Mark Receipts Received? setting activated and another with it deactivated. You set which option you want to use within the Policy. See the following image.

As you can see on the right, the Imaging Configuration dropdown lets you configure which Receipt Imaging Settings option is used by this Policy.

It's best practice to use the option with Mark Receipts Received? set to "Yes" only in Policies for countries where users do not have to provide original receipts. If users must provide original receipts in a given policy or country, use the option with Mark Receipts Received? set to "No".