A receipt is an undeniable proof of a transaction. For several companies, receipts are not only essential for validating expenditures but also play a pivotal role in claiming tax deductions. In the complex world of financial compliance, ensuring that every expense comes with the requisite receipt is a critical part of the audit process.
Setting up a policy for mandating receipts
Navigate to Admin settings > Workflows > Policies
Click on + New policy.
Enable the Are you creating this policy to mandate the receipts? option.
Next, you can choose if this policy needs to be applied only to specific categories or employees. If this section is left blank, it indicates that the policy applies to all expenses and employees in Sage Expense Management
Next, you can choose specific policy conditions such as amount, projects, merchants, cost center, etc. For example, if you want to mandate receipts for all expenses submitted, about $100, you can add that as a condition in the amount section, and only if the expense crosses $100 will a receipt will be required. Similarly, you can mandate receipts for specific projects, merchants, and cost centers, too.
Once you have defined all the policy conditions, you can now configure actions to determine what happens when an expense is submitted without a receipt.
There are three possible actions:
Flag the expense for approvers and verifiers: When this action is enabled, the users will still be able to add the expenses to report and submit for approval; however, the approvers will see a red flag and can decide whether to approve further or not.
Mark the expense as incomplete: This is a critical policy, and this blocks the expense from being added to a report or being submitted for further approval.
How does the policy work for spenders?
If you have set up a non-critical policy, the spenders will still be able to submit expenses. Still, they will need to share additional explanation, and the approvers and verifiers will see an alert of policy violation when they are reviewing the expense.
However, if you have set up a critical policy, two things are expected:
a. If a spender is creating expenses manually, they will not be able to save the expense without adding a receipt; this behaves as a mandatory field and won't let the user continue on the expense journey without a receipt.
b. If the expense is created through integrations such as email forwards or corporate card feed setup in Sage Expense Management, an expense without a receipt will be marked as Incomplete. The spenders would have to edit the expense, add a receipt, and then save it to mark the expense complete and add it to the report or submit it further.
Configuring merchant-based conditions
The Merchant condition is useful when you want to exclude specific merchants from receipt requirements, such as recurring subscription services or merchants that do not issue receipts.
Under Set the policy conditions, select Merchants and choose whether you want to Include or Exclude specific merchants from the policy.
Depending on how merchants are configured for your organization, you can specify merchants in one of the following ways:
Pre-defined merchants: Search for and select one or more merchants from the available list of merchants you've added on Sage Expense Management. Read Managing merchants in your organization article for more information on managing merchants on Sage Expense Management.
Freeform merchants: Enter one or more merchant names manually. When the merchant name on an expense matches one of the merchant names you entered, the expense is evaluated based on the Include or Exclude option you've selected.
You can combine the Merchant condition with other policy conditions such as Amount, Projects, and Cost Center. The policy is applied only when all configured conditions are met.
For example, if you want receipts to be mandatory for all expenses except those from Starbucks and Dominos, add the Merchants condition, choose Exclude, and select or enter Starbucks and Dominos. Expenses from these merchants won't violate the receipt mandatory policy, while expenses from all other merchants will continue to follow the configured receipt requirements.
If you have any more questions about configuring policies, contact our support team at [email protected].