SAP CO Travel Management (Part 1)

Hello everyone! In our today’s session, we’ll learn about something called travel management in SAP environment. Let me give you a brief about travel management. SAP travel management supports all processes in handling a business trip. Now it’s a comprehensive functionality which is integrated with settlement, taxation, and payment processes. Now you must be thinking what a travel management will do in SAP background. Now travel management enables us to request, plan, and book trips. Also, it allows us to create travel expense reports and transfers the expense data to other functional areas. So this is the basic idea behind travel management in SAP.

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Now let us move further with the course content for this particular session. Here first we’ll see the process of a travel management. Then we’ll see the Process Flow, Travel Request, Travel Planning, Travel Expense Report, and how to Create a Travel Request. So this is the process in which a travel management will occur. Now next we’ll see sending a travel request after creation of a travel request. Now in sending a travel request we’ll see what is the Use, the Procedure, and the Result of a Travel Request. Then we’ll see how to approve a travel request, and last we’ll see what is mass approval. So this is the course content for this particular session which is on travel management. So here we’ll see how to create a travel expense report and how to book trips with the help of expense data which is related to the related to the other functional areas. Now first we’ll see the process of a travel management.

Overall Process of Travel Management

Now here first we’ll see what is the purpose of introducing travel management that is a travel expense in this SAP system. The goal of this process is the complete integrated management of all processes involved in a business trip and the travel expenses incurred. The process includes the entire procedure of requesting and planning a trip, accounting the travel expense and the correct taxation in HR, that is payroll accounting, then correct posting of the travel expenses in finance accounting that is FI and clearing and controlling that is CO or funds management that is FIFM according to the allocation by cost principle. So this is the main purpose of introducing a travel management in SAP. So it is helpful in correct taxation in HR then for correct posting to of the travel expenses in FI and clearing and controlling, or we can say in funds management. So this is the main purpose of travel management.

Process Flow

Next, after purpose, there is a process, we’ll see what is the process flow, how does it flow between the functional areas? Now here the overall process can last a relatively long time with the actual trip representing the focal point in this process. The following gives an example of a process flow in decentralized organization in which the traveler represents the central figure. The other forms of organization are, of course, also conceivable. So here this graphical or we can say this pictorial representation gives us how to request a trip, then how to plan or book a trip, and how to set up a trip that is how to settle a trip. 

So here we’ll see request plan then enter settle and evaluating a trip. So this is the processing mode of a SAP travel management. So here first, we’ll decide the need for our trip. That is the business needs to require a trip. So this is our first stage of this travel management process flow. Then we’ll request for that associated trip. So here we can make a travel request which requires approval by the supervisor. So after the need for the trip, we’ll require a request for that particular trip. After the request, we’ll plan and book that trip. That is we must enter the destination and the trip time. Now here you book flight, hotel room, or car rental over an external reservation system. So here after we request trip, we’ll have the plan and the booked trip stage. After that, we’ll add new trip facts. So here you supplement any remaining trip facts that is you can check the trip data and approve it for settlement. Now after this, the next step is we’ll settle the trip if we have any settlement to be approved. So the system settles the trip. Here, we can print a settlement for the employer. And final, here we’ll see about the expenses that is we’ll finalize the financial accounting, cost accounting, taxation, reimbursement, if there are any regarding that trip. So here travel expenses are posted in financial accounting, then trip results are transferred to cost accounting and taxation via payroll. So here we’ll take care of financial accounting, cost accounting, and taxation for that particular trip. So this is the process flow with SAP travel management.

Travel Request

Now next we’ll see how to do a travel request. So here the traveller uses the SAP system to submit a travel request to His or Her Manager. So this is the next step after the process flow. Then we have to request to our supervisor or the manager for approving the travel request. So once we submit the travel request to the manager or the supervisor, the travel request supplies the supervisor that is a superior with information such as date, destination, and purpose of the trip, then the transportation and accommodations required, and the requested advance, and the estimated cost for the trip. So all these details are provided to the superior to whom our request has been sent for approval. Then the manager can approve the request and send it back for corrections or reject it. So it is up to the manager to approve the request. And if an advance is requested and approved, then there are following options for the payment. Now once the request has been approved, then we have to make certain payments.

Now let us see what are the payment options. So first we can pay by cash payment by cash office, or we can do the payment by check, or we can do a bank transfer to the employee’s bank account, or we can forward, that is forwarding of the amounts for payment to financial accounting. So these are the different ways or modes of payment done for that particular trip. Now the paid amounts in the first three cases are, however, also forwarded for posting to financial accounting. So these are the ways through which we can transfer the payment to the person that is a supervisor or the financial accounting.

Travel Planning

So after the travel request, next, we’ll see plan. What is a travel plan? So after a travel request has been approved, the traveller determines the available travel services. That is flight details, hotel, car rental. Now in Germany, we have train so here we’ll include train details also. Now in a travel plan and books them online in the SAP system, the reservation is made in an external reservation system that must be connected to the to the SAP system. When the services are selected and booked, the system checks to make sure they comply with the company’s travel policies as defined in customizing for travel management. It also applies any existing company specific rates and rebate agreement.

So after a travel request has been approved we’ll determine the travel plan, like which mode flight, hotel, car, or train, any mode which is to be selected by that particular person for that particular trip. So the reservation is then made with an external system that must be connected to the SAP system, and it takes care of the company’s travel policies which are defined in the travel management policy book. And it also applies to any existing company specific rates and rebate agreements. So all these things are taken care of while travel planning. Next is when the traveller has recorded the travel plan, the booking code, that is, a PNR number is entered in the processing queue of the travel agency. The travel agency checks the correctness and consistency of the booking. So after a plan is recorded, the PNR code has been entered in the processing queue of the travel agency, and then the travel agency team cross checks the consistency of the booking. This is how a travel plan is been recorded. After that, if changes are made to the booking outside the SAP system, they are transferred to the SAP system in a synchronization process. So after a plan is booked and if any changes are being recorded, then they are directly transferred to the SAP system.

The travel plan is also transferred to the appropriate manager for approval. As soon as the manager has approved the travel plan, the travel agency can issue the ticket and the trip documents and send them to the traveller. So after all the bookings has been done, there is a appropriate manager for approval. So once the manager has approved the travel plan, the agency team issues the tickets and the documents that is the trip documents and send them to the traveller. So this is how the request takes place.

Travel Expense Report

Now after the travel request and travel planning, next we’ll see travel expense report. Now here we’ll see how the mode of payments have been done on basis of financial accounting, cost accounting, and taxation. So travel expense report. After the trip has been taken, the traveller completes his or her travel expense report, including all the necessary data and documents. The system applies all statutory and company specific specifications stored in customizing and checks the consistency of the entries against these specifications. Now here the expense department checks the travel expense report and the additional documents and receipts. Now the travel expense report is sent to the manager for approval who can then release it for settlement. So once the trip has been taken, the traveller then fills a travel expense report, which includes all the documents that is related to that particular trip. Then all this data is been checked against the entries that are the records stored in the SAP system. Then the expense department checks the expense travel expense report and the documents and the results which are provided by the traveller, and then it is sent to the manager for the approval who then releases it for the settlement. Next is as soon as the trip is approved by the manager, it is settled in the SAP system. So on the basis of the trip provisions set for the relevant traveller, the system determines the travel expense results, especially the amount for reimbursement. To determine the reimbursement amount, you can choose between per diem or flat rate reimbursement and reimbursement according to individual receipts for meals, accommodations, and travel cost for all other categories. Reimbursement on the basis of individual receipts must be used.

So once it has been approved by the manager for the settlement, then we’ll check for the reimbursement if there are any in that particular mentioned travel expense results. Now here reimbursement amount can be determined on the basis of their meal vouchers, on the basis of their accommodations, on travel cost, and for other categories based on the individual receipts. So here, after it has been approved, the travel expense results have been calculated for the amount for reimbursement. Then the travel expense results are prepared to suit the method of payment chosen and made available to the corresponding components with the appropriate additional functions. So once the expense report is being calculated and the payment method has been chosen, then they make available the components like financial accounting, payroll accounting, and controlling management funds that is controlling funds management. So here the payments can be made in these three component. That is these are the available components in which the payments needs to be done. Here the payment of reimbursement amounts can now take place as follows by check, through payroll accounting, to through financial accounting, or by bank transfer to the employee’s bank account. So when the final expense report is generated and the mode of payment for that reimbursement needs to be take place, then we’ll take or we can choose the process of by check, by payment through payroll accounting, by payment through financial accounting, or directly bank transferred or directly transferring the amount to the employee’s bank account.

Now after this, the travel expense results are transferred for posting to the financial accounting, and the amounts are transferred from financial accounting to the control link. The traveller receives a travel expense statement with the relevant trip data and the accounting results. So after the reimbursement, the reimbursement as in the money which can be reimbursed, we can transfer the details for posting to the financial accounting, and then it is transferred to the controlling account. That is the amounts are transferred from financial accounting to the controlling. And then the traveller receives a statement of their travel expense with the relevant trip data and the accounting reasons. So this is how the travel expense report is generated.

Now last, we’ll see the result for that particular trip. A single, complete record of the data of a business trip exists in the SAP system. The travel planning data was recorded in the system for approval or reservation purpose. The documents were issued on the basis of the reserved travel services. The SAP system has settled the travel expenses incurred by the trip and forwarded them for further processing and financial accounting, controlling funds management, and payroll accounting if necessary. So this is the result which we receive at the end of this trip. So here we have seen the process of the travel management. That is the process flow, the travel request, how do we plan a travel, then what are the travel expense report, And how do we get the result? That is a expense statement at the end of this travel. So this were the overall process for that particular trip.

Next, we’ll see how to create a travel request.