Prepaid Expenses

Prepaid expenses are travel or business expenses that a company directly pays to the vendors or merchants before or after an employee enters them in an expense report.

Entering these expenses in expense reports allows companies to accurately allocate these expenses.

How to Enable Prepaid Expenses

You can enable prepaid expenses for an expense type from the Manage Expense Report Templates page. When you enable prepaid expenses for an expense type, the Create Expense page displays the This is a prepaid expense check box when that expense type is selected. Employees can enter the prepaid expenses in the expense report for these expense types by selecting this check box.

Note: You can’t enable prepaid expenses for itemization only expense types.

When the Process Expense Reimbursements process runs, prepaid expenses aren’t passed to Payables and the employees don't receive reimbursement for the prepaid expenses. The accounting distributions for the prepaid expenses aren’t passed to Payables because the expenses were prepaid. The companies are expected to have captured the accounting distributions in the original payments made to the merchants.

To enable prepaid expenses, perform the following steps:

In the Setup and Maintenance work area, use the following:
1. Offering: Financials
2. Functional Area: Expenses
3. Task: Manage Expense Report Templates
On the Manage Expense Report Templates page, select the template you want to modify.
On the Edit Expense Report Template page, search and select the expense type for which you want to allow prepaid expenses.
Select Allow prepaid expense items.
Click Save or Save and Close.
Repeat steps 3-5 for each expense type you want to enable for prepaid expenses.

You can also create prepaid expenses using these Expenses REST APIs:

Create an expense record
Update an expense record.

The expense is marked as prepaid if the PrepaidFlag parameter is set to 'Y' in the expense payload.