Step by step guide to create expense reports in Netsuite
One major component of business expenses that management often overlooks is the tracking and controlling of expenses.
But before you can even track or control expenses, they need to be transparent and visible to finance controllers and accounting teams at all times.
The way this has been done for years is by having employees create expense reports that account for all the expenses that were incurred during a particular project or task.
With time, businesses have started to use digital systems like Netsuite’s expense reporting function instead of just excel sheets.
Creating expense reports in Netsuite is a much better way for companies to keep track of things as it acts as a centralized and integrated system for different departments.
What is Netsuite’s expense reporting?
A Netsuite expense report is an expense report that is created by team members of an organization within the Netsuite portal using their respective accounts.
This expense report is similar to the format in which they are generally created and includes important details like
• A description of what was purchased
• The amount that was spent for this particular expense
• A justification or reason for the spending
An employee can add multiple expenses with their particulars within a single report rather than having to add each one separately.
For companies that have employees in different countries and those who have to conduct expenses in different currencies, the system also gives you the ability to add multi-currency expenses.
The system then automatically converts the currency value into the standard currency being used by the organization on Netsuite.
Employees can easily save their expense reports on the system so that they can edit them with further details or other expenses in the future before they submit the report.
Once you create an expense report in Netsuite it stays in an unapproved expense account. Only when you submit the report, it will move forward for approvals to the assigned approvers.
After someone from the accounting team approves the expense report claims, the amount will be reflected in the company books.
What are Netsuite expense report features and how to enable them?
As mentioned previously, an administrator on the platform has to first enable the expense reporting feature on the Netsuite platform for employees to be able to create them.
An admin can do this by going to the employees sub-tab and following this path - Setup > Company > Enable Features.
But that is not all. Once expense reporting has been enabled on the platform, the employee who wants to create an expense report must also be a part of the system with their role given as ‘Employee Center.’
All your employees must be added to employee records so that they can create expense reports for themselves.
Once an individual has access to the system with the ‘Employee Center’ role, they can do the following
• Create their own expense reports on the platform
• Edit and view their expense reports as long as they have not submitted it
• View their approved expense reports
• And also approve expense reports of their juniors if they happen to be a part of senior management
Employers or senior employees who have been assigned the role of a supervisor or expense approver on the platform also have access to the expense reports of their juniors.
Steps to creating expense reports in Netsuite
Netsuite gives you a very dynamic and flexible way of creating expense reports that have many details that can be added.
This helps in keeping expense reports clear and giving as much information to the accounting team to verify and process the reports quicker.
1. How to create expense reports for an ‘Employee Center-based role’?
As an employee center-based role, you will have the option to start creating an expense report through your homepage with the Expense reports section.
2. How to generate expense reports if you do not have an ‘Employee Center-based role’?
To create expense reports in Netsuite directly from the homepage of your Netsuite dashboard, you must be assigned the ‘Employee Center’ based role.
If you do not have that, then you can still generate expense reports of yours or another employee in Netsuite by selecting the ‘Transactions’ dropdown, then selecting the ‘Employees’ dropdown, and then selecting ‘Enter Expense Reports.’
How to complete an expense report in Netsuite?
Follow these steps to complete an expense report on the Netsuite platform
1. Once you have selected the ‘Enter Expense Report’ option, you will be taken to a default expense report form that has been set by your company.
2. Ensure that this is the case so that you are able to fill all the necessary fields that your company requires and has hence made such a preset.
3. The Employee box will mention either your own name or you can select another employee to create the expense report for.
4. The number on the expense report is automatically populated through the system. Ideally, this should not be changed, but can be if you wish to.
5. Similarly, the posting period of the expense report you are creating is also automatically selected. Depending on when the report is approved, this might change.
6. For the ‘Date’ section, select the date on which your expense report is due.
7. There is an ‘Advance to Apply’ section where you can add any advances for the reimbursement that you are applying for.
8. Within the ‘Purpose’ field, you must add a brief description of what all the expenses in the report are related to. For example a particular project, team dinner, etc.
9. You will see a checkbox that says ‘Complete.’ This is automatically ticked by default. Turn it off if you are planning to save this expense report and add more details later.
If you don’t do this, you will not be able to edit the report later on.
10. If you have expenses in different currencies, select the ‘Multi-currency’ box so that you can add expenses in different currencies.
Once you have filled up all the primary information mentioned above, now you must add the actual details of all the expenses line by line.
For every line item, following details you will be able to see and fill
Reference Number - This is automatically generated and follows a sequential order for each consecutive expense. You can edit this if you want.
Date - This section should include the date the expense was made on.
Category - Select the category this particular expense falls under from the list available.
Currency - If the expense was made in a different currency than what your company deals in, select it from the list.
Foreign Amount - Based on the selected currency, enter the amount that was spent on this expense.
Exchange Rate - The currency conversion rate must be entered in this column.
Amount(in company default currency) - This section will automatically populate a value based on the currency, exchange rate, and the amount you put in the previous sections.
Memo/Note - This is a text field that allows you to add any notes or information related to the specific expense you want to give your supervisor or approver for better clarity.
Department - Select the department under which you operate.
Location - Select the location where the expense was made in.
Client - If the expense made was for a particular client that the company can bill back to, later on, select that client from the available list.
Billable - If the expense made is one that is billable to the client selected, then you must check this box.
Attach File - This section lets you attach documents such as pictures of receipts so that approvers or the accounting team can easily verify and reconcile an expense.
Non-Reimbursable - If this particular expense cannot be reimbursed, then select this box.
Once you add the above details for a line item, you can add another expense in the same report by clicking on the ‘Add’ button. Then you can repeat all the steps and fill in the necessary fields.
If you have to add more line items in the report later on, then save it. If you have finished adding all expenses, then click on the ‘Submit’ button with the ‘Complete’ box selected.
How does expense report approval work with Netsuite?
Approval workflows are custom features that a company can set up and create as per their hierarchy within the organization.
It allows management to handle and keep track of expenses easily. It also allows the accounting team to deal with expenses in a much more systematic manner.
An important thing to note is that this feature is not automatically enabled. So in cases where approval workflows have not been set up, the expense reports that employees submit are directly sent to their supervisors on the platform.
If the approval workflows have been created, then the report goes to the relevant supervisors and approvers.
Steps in accounting approval of expense report in Netsuite
Accountants or an employee with an AP role within the Netsuite system only get a request to approve an expense report after it has been approved by a supervisor or an approver of the employee who submitted the report in the first place.
This helps the accounting team so that they don’t have to constantly run behind employees to verify and check whether all necessary fields have been put in or not.
Another interesting thing to note is that when an employee submits a report, it stays in an unapproved expense account that does not affect the company ledger.
Only after accountant has approved the expense report, a bill is created and the amount is recorded in company books. The expense report is posted in the period that is currently open and not necessarily the one during which it was created.
What are expense categories in Netsuite and how to create them?
Expense categories are a way of classifying certain expenses into a common bucket so that a company can understand the type of expenditure their employees are broadly spending.
Some examples of broad categories that are present and accepted universally include, advertising expenses, travel expenses, food and dining expenses, etc.
By knowing what kind of expenses company budgets are being utilized for, the management can measure the financial requirements and draft better budgets for their teams.
Each expense category is also linked to its individual expense account. When employees are creating their expense reports, they must select a specific category from the list that has been created within your company's Netsuite dashboard.
Create your own expense categories within Netsuite by following these steps
On the Netsuite portal, navigate your way using this path - Setup > Accounting > Setup Tasks > Expense Categories > New.
Name - Add what you would like this particular category to be called. For example, Advertising expenses, Travel expenses, etc.
Description - Add a brief explanation of the type of expenses that this category covers. For example, advertising expenses could cover any online and offline expenses that are made for marketing and media creation purposes.
Expense account - Select the relevant expense account that will be used for the category to be charged from.
Rate is required - Certain expense categories might have a fixed rate that they are charged. By selecting the ‘Rate is Required’ box, you’ll be able to add a Default Rate.
So when an employee enters an expense with this particular category, then they will also have to add ‘Quantity’ and ‘Rate’ details to calculate the final amount
Lastly, click on ‘Save’ to save this category on the system.
Related read: Benefits of accounting automation with Netsuite for businesses
How to create expense report policies in Netsuite?
An expense report policy within Netsuite allows finance and accounting teams to control certain aspects of the expense reporting process.
Creating a policy includes setting a start and end date for the policy during which it will be applicable, setting filters for the policy to be applied, and setting limitations along with how they will be applied.
For an expense policy to be applicable, the expense report must satisfy the conditions/filters that were set by you beforehand.
Only when they fulfill the criteria will the limits be applied. When there are multiple filters defined, then the expense report must qualify at least one of them for the limits to be applicable.
Only an administrator by default can create expense policies. The expense policies can be viewed in the Employee Center.
So make sure that all relevant employees have the ‘Employee Center’ role assigned to them for easy access and viewing of the policies.
Creating an expense report policy
Navigate the Netsuite dashboard of your company using this path - Setup > Accounting > Expense Report Policies > New.
1. First, give a name to your expense policy.
2. Select the date on which this policy would go live.
3. In the ‘End Date field, select the date this expiry will expire if there is one.
4. You can also select other filters that this particular policy would apply to such as a location, department, customer, or subsidiary. You can select more than one filter.
5. Next, you must select the expense category this policy applies to. You can select more than one expense category for this purpose.
6. The next field, the ‘Limit Type’ is where you must choose how this policy is applied to an expense report. It can be customized based on whether you want to apply it to all line items in a report, individual expense reports, or all expense reports on a daily basis.
7. In the field that says ‘Maximum Amount’, enter the value that this policy enforces not to be crossed.
8. The ‘Action’ field is where you can define how any violation of this policy will be handled.
You get the following ways of informing or enforcing the policy
Warn but allow expenses outside the limit – When this option is selected, a warning will be shown to the employee and the report can still be submitted.
Do not allow outside limit – This action warns the employee as well as does not let them submit the expense report.
Do not warn if required fields are included - This action allows an employee to enter an amount or expense outside the policy’s limit if they are able to fill in other required fields.
9. You can also check the ‘Requires Receipt’ box so that employees add it as proof of purchase and it is easier to verify.
10. Once you have set up all the relevant filters and limits, click on save to implement this policy.
How to approve expense reports in Netsuite?
1. An employee submits an expense report.
2. The supervisors and approvers of the employee who submitted the report are notified via email.
3. The supervisor or approver can then open the Netsuite system and go to the Employee Center to view the expense report that has been submitted.
4. If there is missing information or the expense does not seem to match the company policies, the supervisor or approver can reject the expense report and add a note that elaborates why it was rejected or whether more information is needed.
Once the note is added and the expense report is rejected, it is sent back to the employee.
5. If the supervisor or approver sees that all the details on the expense report are fine, then they can approve it.
6. Once approved by the supervisor or approver, the expense report then moves on to the accounting team for approval.
Important things to note
If approval routing has not been enabled from the settings, then the expense report directly goes to the supervisor and upon approval moves forward to the accounting team.
If approval routing has been set up, then the expense report goes directly to the approver and not to the supervisor.
If the amount on the expense report is greater than the expense approval limit of the employee’s approver, then the report is forwarded to a higher approver level.
An expense report that has been submitted by an employee stays in an unapproved expense account that does not affect accounting in any way.
Only once someone from the accounting team has approved the report does it move into the general ledger of the company.
For a supervisor to be automatically notified, the administrator must enable the ‘Automatically Notify Supervisor’ box in the settings.
How to edit expense reports in Netsuite?
An employee can edit their own expense reports before submitting them or if it has been rejected by the approver or supervisor.
To edit the expense report, you must go to the following destination on your dashboard - Transactions > Employees > Enter Expense Reports > List.
Once you have reached here, you can edit an expense report that you see on your list. You can make changes to the fields you had filled in, add new information that was missing previously, and also attach relevant items like receipts.
Once you have made all the necessary changes, click on ‘Save.’
How to delete expense reports in Netsuite?
To delete a Netsuite expense report navigate to Transactions > Employees > Enter Expense Reports > List on your dashboard.
Click on the ‘Edit’ button of the expense report that you want to delete.
You will find an ‘Actions’ button. Select it and choose ‘Delete’.
Once you are prompted to confirm, click on the ‘OK’ button.
How to reject expense reports in Netsuite?
Employees who are responsible for approving expense reports or are supervisors can reject an expense report. When a junior employee under your department submits an expense report, you will be notified about it.
You can find and view these reports by going to Transactions > Employees > Enter Expense Reports > List. Once you reach here, you can view the report and have the option to ‘Accept’ or ‘Reject’ it using specific buttons.
When rejecting a report, you will be prompted to add a message that describes why it is being rejected. This will help the employee to resubmit the report with proper corrections if applicable.
Related read: Complete guide to Netsuite invoice processing
Integrate the right expense management solution with Netsuite
Netsuite has many products that it can integrate within the market that make it more helpful for businesses than it already is.
One such product is Volopay - An all-in-one expense management platform that helps you track, control, and view all expenses in real time!
Here is a quick summary of what makes Volopay the perfect financial tool for finance and accounting teams to use alongside Netsuite.
Corporate cards
Volopay helps companies issue individual corporate cards for all their employees. This removes the need for creating expense reports altogether as money is directly spent from company budgets.
You also don’t need to worry about overspending as you can set custom limits on all cards. We also give you the ability to create unlimited virtual cards to manage all online expenses.
Business account
Easily transfer money across the world at the lowest rate. Use multicurrency wallets wherever applicable to avoid FX charges.
Accounts payable
Manage all vendor payments from a single dashboard. Send domestic and international payments with ease. Process invoices and automate your payments with scheduling and recurring payment creation.
Accounting automation
Since Volopay has native integration with Netsuite, you can easily sync all transactions. A two-way sync allows important accounting fields from Netsuite to be pulled in Volopay and transferred back in the format that Netsuite records its books.
Volopay also helps you save time on manual accounting efforts with the help of ‘Triggers’ a feature that lets you set auto-classify transactions.
FAQs
A great way to organize expense reports is by adding all expenses in it by the date on which they happened. Make sure you have all the necessary information you need to put in for expenses and also add important documents like receipts.
An expense report should include the date on which the expense was made, the amount of the expense, the currency, location, department, expense category, rate if applicable, relevant client if any, and a picture/document of the receipt of the expense.
To be able to use the Netsuite expense reporting feature, you must be assigned the ‘Employee Center’ role by the admin of the platform in your company.
If you have access to the Employee Center on Netsuite then you can simply go to the homepage and you’ll see the option to view all the expense reports that are under your purview. If you don’t have access to the Employee Center, then you must use the following route on the platform - Transactions > Employees > Enter Expense Reports.