Travel is one of the largest controllable expenses for a company. However, it can spiral out of control without proper policy enforcement and reporting. SAP’s Travel Management (FI-TV) module is designed to help a company manage these costs. It is made up of two applications: travel expense and travel planning. You can implement one without the other.

If you are thinking about implementing the expense processing application, you have some planning and decision-making ahead of you. It may seem simple compared to some modules, but don’t be fooled. It’s actually complex because it is designed to satisfy the legal and business requirements of numerous countries. For example, Mexico requires the use of a hard currency to report expenses. Many European countries require you to list stopovers in other countries during travel and how much time was spent there. For the United States alone, FI-TV offers three accounting methods. Add to that the best business practices enforced by the companies themselves.

What follows are an eight-step to-do list and nine strategic tips that will help you design your implementation. I’ll give you a business process perspective on the technical configuration to help you get started on planning. This article doesn’t cover all decisions to be made because each company is different and implementations can vary greatly.

To-Do List

1. For the United States, choose an accounting method.

If you are working for a U.S. company, you can choose among three legally accepted accounting methods: actual receipt/expenses, meals and incidentals (M-I), and the high-low method (H-L).

Actual receipt accounting is the most popular for the majority of non-government companies. Basically, the company reimburses the employee for actual expenses, with the exception of mileage reimbursement. Mileage is reimbursed by multiplying mileage times a flat amount per mile, usually equal to or less than the federal rate. An advantage to this method is that you don’t have to keep up with federal rate updates.

The M-I and H-L methods are both accounting methods for reporting business expenses using per diems, or daily allowances, versus reimbursing for each expense. The M-I method provides for daily allowances for meals and incidental expenses according to location traveled. Lodging expenses are still reimbursed according to receipts. The H-L method includes daily allowances for lodging, meals, and incidental expenses according to location and date of travel. These rates are stored in the R/3 system, which provides a method of obtaining the federal legal updates. For more information, see IRS publication 463.

Most non-government U.S. companies choose actual receipt accounting because it is simple. The other two methods require the maintainance of per-diem rates in the system by location traveled.

2. Decide how to reimburse the employee.

Two processes are available for the actual reimbursement of the employee — through SAP FI or through Payroll.

An advantage of reimbursing through Payroll is that you don’t have to cut an extra check for the employee or do another data-medium-exchange file transfer to the bank just for travel expenses. Additional configuration is needed if you decide to reimburse using payroll, such as setting up expense wage types, adding wage types to the remuneration statement, and switching on the integration between the two modules. Of course, to switch on the integration, you must have already implemented the Payroll module.

Most U.S. companies, however, decide to use FI to reimburse employee travel expenses. Travel expense is considered as an FI function by most U.S. companies. This is why it is now under the FI module. (It used to be under the HR module, thus the close ties with HR.)

3. Identify expense types. Split expense types into paid and unpaid — paid expense types being those paid by the company.

4. Identify the accounts for the expenses to be posted, including mileage.

5. Identify maximum amounts for expenses and the type of system response for the maximum amount.

6. Decide if you want the standard system warning/error messages for expense type maximum amounts or your own customized messages.

7. Identify different user roles, such as “approver” and “traveler.” These roles are the basis for authorizations.

8. Identify users, because you need to set up authorizations and vendors if you reimburse through FI. The module provides a program to automatically set up vendors for your employees.

9 Tips to Consider

• Before getting started, copy the Trip Provision Variant, or accounting method, from client 000 (menu path Travel Expenses > Master Data > Define/Delete/Restore Trip Provision Variants). R/3 supplies sample entries that aid in the configuration. If you skip this step, you have to start configuration from scratch because there will be no entries in the tables to reference.

• For posting to FI, some steps are not intuitive. Take, for example, the Travel Management IMG step, Define Assignment of wage type to symbolic account. To understand this step, you need some familiarity with the Payroll module to know what a wage type is. When you configure your expense types, you assign a wage type to them. In this step, you translate how that wage type is posted by using a symbolic account code or a code that represents an account. Examples of a symbolic account code would be 10, 20, or 30. You also specify if the posting is a debit or a credit. This is done by using a plus sign for debit or minus sign for credit in front of the symbolic account: i.e., +10 or -10. I recommend reading the IMG step documentation.

• For configuring features, follow the examples and read the documentation carefully. Features are SAP decision trees, found frequently in the HR module.² If you have a typographical error in your configuration, the feature will not work. Check for syntax errors by clicking the check icon before saving.

• Each personnel area needs its own trip number range. The ranges should not overlap. Create the ranges with archiving in mind. Ask the question, “After how many trips do I want to archive or delete the trips out of the system for a personnel area?” For example, if Personnel Area A has a trip number range of 00001 to 99999, Personnel Area B would have a range of 100000 to 199999, and Personnel Area C a range of 200000 to 299999. Once you archive the trips off the system, you can reset the range.

• Play around with the different entry screens for FI-TV after you configure your system. Then choose the best entry method for your company’s requirements. For example, the weekly report has the layout of a spreadsheet but less functionality than the Travel Manager entry screen. (See Figures 1 and 2.) The weekly report was designed with the U.S. in mind, which means it was designed for the receipts accounting method. Therefore, you cannot use it to do per-diem accounting for meals and accommodations.

Figure 1

Weekly report entry screen

Figure 2

Travel Manager entry screen

• In the HR module, infotype 0017, travel privileges have to be set up for each employee who enters expenses (See Figure 3). The information that goes into this infotype is configured in the FI-TV IMG steps. Among other things, travel privileges control the expense types for which an employee can be reimbursed. For instance, a sales manager can enter an entertainment expense, but a programmer cannot.

Figure 3

Defining employee groupings for expense types

• Investigate implementing the credit card clearing configuration, which supports a few major credit card companies. An employee can charge all his or her business trip expenses to a company credit card. A file with the expense information is sent periodically from the credit card company to your company to be uploaded. The employee enters the general trip information, such as dates traveled, reason, and location, and then clicks on the credit card clearing button to bring in all expenses automatically.
• From 4.6C, a mobile version of FI-TV is available so that an employee can enter expenses off-line, while at an airport, for example. When the employee gets back from a trip, he or she can synchronize a mobile computer unit with the R/3 system.
• Use FI-TV’s reporting functionality. You can see quickly where employees are traveling, what the big expenses are, or which customers are costing the most in travel expenses. In addition, you can generate statistics on how much you are using the services of hotel chains or airlines, giving you negotiating power.