Processing Corporate Credit Cards

This appendix covers the following topics:

 Credit Card Process Flows

 Credit Card Processing Steps
 Company Pay Credit Card Transactions Accounting
 Accounting for Credit Card Transactions
 Managing Credit Card Transactions

Credit Card Process Flows

 Individual Pay. Employee pays the credit card provider for all credit card
transactions.
 Both Pay. The employee pays the credit card provider for personal expenses,
and your company pays the credit card provider for business expenses.
 Company Pay. Company pays the credit card provider for all transactions.
Individual Pay Scenario

This diagram illustrates the Individual Pay Scenario.

The individual pay scenario is simpler than both or company pay. Whether a user
identifies credit card transactions as business or personal expenses, the user pays
the credit card provider for all transactions. When the employee creates an expense
report, only those transactions designated as business are reported on the expense
report. The employee is eventually reimbursed by their employer for those credit
card business expenses.
To process credit card transactions:

1. Obtain the credit card transactions data file from your credit card provider.
2. Load and validate your transactions. See: Loading and Validating Credit Card
Transactions for more information.
3. Create and submit expense report.

When users create expense reports, they select the credit card transactions
that they want to submit on an expense report. During this step, users
determine if transactions are business or personal expenses. By default,
transactions are flagged as Business. Users will only be reimbursed by their
employers for business expenses. Once processed on an expense report,
credit card transactions are no longer available in the list of transactions to be
added to expense reports. This is true for both business and personal
expenses.

4. Approve and Review Expense Reports.

After the user submits the expense report, the manager needs to approve the
expense report. After the manager has approved the expense report, then
your expense report needs to be verified to ensure that required receipts are
sent in and that the expense report is in compliance with your company's
business policies.

5. Export the Expense Reports into Payables.

After the expense report has been approved and reviewed, it is ready to be
exported into Payables as an invoice. To create the invoice due to the
employee, you need to select the Source of Internet Expenseswhen you run
the Expense Report Export program.
Both Pay Scenario

This diagram illustrates the Both Pay Scenario.

For the Both Pay scenario, your company pays the credit card provider for
transactions that are categorized as business expenses. Employees are expected to
pay the credit card provider for all credit card transactions reported as personal
expenses. As shown in the illustration, an invoice cannot be created for the credit
card provider until the expense report is exported into Oracle Payables as an invoice.

1. Obtain the credit card transactions data file from your credit card provider.
2. Load and validate your transactions. See: Loading and Validating Credit Card
Transactions for more information.
3. Create and submit an expense report.

When users create expense reports, they select the credit card transactions
that they want to submit on an expense report. For the Both Pay Scenario,
 users will only be reimbursed by their employers for cash and other business
expenses. Once processed on an expense report, credit card transactions are
no longer available in the list of transactions to be added to expense reports.
This is true for both business and personal expenses.

4. Approve and review expense reports.

Once the Payables review process is complete for an expense report, the
expense report splits into two expense reports to create invoices for the user
and the credit card provider: Cash and Other Expenses and Credit Card
Expenses. The expense report number for the Credit Card Expenses expense
report becomes <expense report number>.1.

Note: The Credit Card Expenses expense report is not viewable in the
Expenses Entry pages or the Expenses Reporting and Analysis pages, but is
available to Expenses Audit.

5. Export the expense reports into Payables. Enter Internet Expenses in the
Source parameter of the Expense Report Export program.

See: Expense Report Export Program, Oracle Payables User Guide.

The user invoice contains accounting distributions for both the Cash and
Other Expenses and Credit Card Expenses. The credit card provider invoice
contains a single accounting distribution for all credit card expenses.
Company Pay Scenario

This diagram illustrates the Company Pay Scenario:

For the Company Pay scenario, employers pay for all credit card transactions
incurred by their employees. Employees are only reimbursed for cash and other (out
of pocket) business expenses. Credit card transactions reported as business
expenses have no effect on the amount that is reimbursed to the employee. On the
other hand, if an employee reports any transactions as personal expenses, these
transactions are offset against any cash and other expenses reported on the
expense report. In other words, the amount reimbursable to the employee will be
reduced by the amount of credit card personal expenses.

To process a Company Pay expense report:

1. Obtain the credit card transactions data file from your credit card provider.
2. Load and validate your transactions. See: Loading and Validating Credit Card
Transactions for more information.
3. Create and submit expense report.

When users create expense reports, they select the credit card transactions
that they want to submit on an expense report. During this step, users
 determine if transactions are business or personal expenses. Users will be
reimbursed by their employers for only cash and other business expenses.
(Cash and other expenses represent expenses that were not charged to the
company credit card but are business expenses.) They will not be reimbursed
for any business credit card expenses. Credit card transactions designated as
personal expenses will reduce the amount that the employee will be
reimbursed. Once processed on an expense report, credit card transactions
are no longer available in the list of transactions to be added to expense
reports. This is true for both business and personal expenses.

4. Approve and Review Expense Reports.

For both the manager approval and expense report audit/review, any credit
card transactions designated as personal expenses will be listed as a separate
negative line item on the expense report. This negative line item will have an
expense type of “Personal”.

5. Export the Expense Reports into Payables.

To create the invoice due to the employee, you need to select the Source
of Internet Expenses when you run the Expense Report Export program.
When the employee invoice is created, an API is called that is used to account
for expense reports when the Company Pay option is used.

See: Expense Report Export Program, Oracle Payables User Guide.

6. Create and import the credit card provider invoice.

To create the credit card provider invoice and import it into Oracle Payables,
you must run the Create Credit Card Issuer Invoice program in Payables.
Accounting for Credit Card Transactions

The accounting entries that are created will be different depending on which
payment option is used. To illustrate the accounting entries, assume that an expense
report was created with these details:

 Cash and Other Expenses: $500

 Credit Card Business Expenses: $650
 Credit Card Personal Expenses: $299

Also, assume that the total credit card transactions received from the credit card
provider was $949 (the sum of the business and personal expenses). In addition,
assume that there are no employee advances applied to the expense report. This
table summarizes who will be invoiced based on the payment scenario.

Payment Report Total Amount Due Amount Due Credit Card

Scenario * Employee Company

Individual Pay 1,150.00 1,150.00 0.00

Both Pay 1,150.00 500.00 650.00

Company Pay 1,150.00 201.00 949.00

* The report total only includes cash and other expenses and credit card business
expenses.

When the employee's invoice is first exported into Payables, the invoice amount at
the header level will equal the Amount Due Employee as noted in the table above.
This table describes the complete accounting for all invoices created (note that all
lines shown as expense lines, whether business or personal, represent the invoice
distribution lines for the invoices).

Individual Pay
Account Debit Credit

Out of pocket business Expense 500.00

Credit card business expense 650.00

Liability (due to employee) 1,150.00

Both Pay

User Invoice

Account Debit Credit

Cash and other expenses 500.00

Liability (due to user) 500.00

Credit card expenses 650.00

Expense Clearing account 650.00

Credit Card Provider Invoice

Account Debit Credit

Expense Clearing Account 650.00

Liability (due to credit card provider) 650.00

Company Pay
Account Debit Credit

Expense Clearing account 949.00

Liability (credit card provider) 949.00

To create invoice due to a credit card provider. Note that all credit card transactions
are charged to the Expenses Clearing account. This is always the case.

Account Debit Credit

Out of pocket business expense 500.00

Credit card business expense 650.00

Credit card business Expenses Clearing a/c offset 650.00

Credit card personal Expenses Clearing a/c offset 299.00

Liability (due to employee) 201.00
Expense Report Credit Card Transactions
Employee can see the outstanding credit card transactions (or transactions that are not expensed
yet).

Once the employee selects the credit card transactions and adds to expense report the status of
expense report is “In Progress”. If employee leaves the session and logs in back again the
previously selected credit card transaction will disappear from this page and will be available in “In
Progress” Expense report. Employee can categorize the transactions as Business or Personal in
this page and also assign expense types to credit card business transactions.

FIELD COMMENTS

Pre-Itemized This will be checked if the credit card transactions have lists of items included in it.

Transaction
Date Date on which the transaction has occurred.

Age(Days) This is ageing of the transaction indicating how long it has been outstanding

Transaction
Amount Transaction Amount in local currency.

Merchant
Name Name of merchant or establishment

Location Original Transaction Location

The transaction amount in the cardholder's billing currency. This is the amount that
Billed Amount the cardholder sees on the statement.
This page will be available if any credit card transactions are selected in “Credit Card

Transactions page”

FIELD/

BUTTON COMMENTS

Categorize as
Personal This functionality lets users to categorize the transactions as Personal

Receipt This is the original transaction amount and for foreign transactions this will be the
Amount expense incurred in foreign currency.

Expense Type Employee should select appropriate Expense Type for the credit card transactions

Merchant Name of merchant or establishment

Name