Using Microsoft Dynamics ERP Expenditure Approval Best Practices

Close the barn door before the horse has bolted - how Microsoft Dynamics NAV can help tracking expenditures.

You can’t turn on the TV, open a newspaper, or hit the Twittersphere without encountering a story on the “Senate Scandal”.  What strikes me as most interesting about this debacle is how little focus is placed on how these expenses were reimbursed in the first place.

Pamela Wallin has criticized the audit process as “fundamentally flawed and unfair.”  (1)  Are you kidding – the audit process?

What about the expense submission, approval, and reimbursement process?

This is a perfect example of closing the barn door after the horse has bolted.

Had these expenses been recognized as ineligible and not paid we would have saved much grief and Parliamentary time in discussing the scandal along with the ins and outs of the repayments.

Microsoft Dynamics NAV saving much grief.

Even small to medium sized businesses (SMB’s) have a host of business practices and technology to help prevent inappropriate expenses from being incurred and reimbursed.

Consider some of the options available for your organization:   Ÿ

Human Resource Policies and Handbooks   

  • Every company should create a document that defines the human resource policies.  It does not have to be extensive, but does need to cover the most critical concepts for the organization.
  • Consider it your internal frequently asked questions (FAQ) manual.  Make it easily available to staff by publishing it on an intranet site such as Microsoft SharePoint where it is searchable, printable, and version controlled so there is no question that the current copy is being referenced.   Ÿ

Standard Forms   

  • Ensure the form that is used for submitting purchase order requests or expense claims are consistent and well-designed to collect all required information and leave little room for confusion.
  • Electronic forms are an excellent option as calculated fields can be locked down and the submission process supports approval routings while auditing any changes made to the original data.   Ÿ

Corporate Credit Cards   

  • Credit cards are getting smarter everyday.  Chip options facilitate placing restrictions on how, when, where, and what the credit card can be used for.   Ÿ

Purchase Requisition Management Software   

  • Online purchase requisition management software allows you to configure the rules around specific users, allowable expense types, and approval routing.  Approval may follow the organization structure or be defined by type of item being purchased.
  • These online solutions can provide an audit trail of rejections, changes, and approvals.  With integration to your Enterprise Resource Planning (ERP) system you can ensure the correct GL account coding is applied and integrate the approved requisitions for invoice matching and payment.   Ÿ

Enterprise Resource Planning (ERP) Software   

  • ERP software for small to medium sized businesses has come a long way in terms of integration to other systems.
  • For example, both Microsoft Dynamics GP and Microsoft Dynamics NAV include approval workflow that can be accessed from within the ERP software, through Microsoft Outlook, or via Microsoft SharePoint.
  • This functionality enables a user to request approval from a supervisor before the Purchase Order can be released and printed.  The approver can be on the road and still receive and approve a request through Microsoft Outlook.   Ÿ

Actual versus Budget Controls    

  • Microsoft Dynamics GP includes modules that facilitates control over expenditures by comparing the request to an approved budget.
  • Purchase Order Commitments and Encumbrance Management are modules used to compare the budget assigned to a general ledger account against the already consumed invoices and the outstanding purchase orders.    This guards against issuing a purchase order that will result in the approved budget being exceeded.
  • For example, if you have an annual budget of $12,000 and a purchase order is created for $2,000, the available budget is $10,000. A new purchase order for $10,500 will exceed the budget and a warning will be provided.

There are tools available to help you avoid a corporate expense scandal.

Let’s hope that the audit findings from the Senate scandal result in strong recommendations for preventing these issues in our government’s future.

Dynamics GP Coffee Break | Setting up ACH and EFT in Dynamics GP

This webinar will go through the basics of setting up ACH / EFT for accounts payable and accounts receivable. We'll walk you through the settings and the default setups.

May 21
9:00 am – 9:25 am

Register here

Webinar - Setting up ACH and EFT in GP

May. 21
9:00 am – 9:25 am