PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
What is considered a Prepaid Expense?
1. Any payment made directly to a third party prior to the actual trip
2. Any reimbursement to the traveler prior to the actual trip
Some expense types that might typically need to be prepaid include: conference registration fees, transportation costs,
and lodging.
General Processing Steps:
1. Enter Travel Request (if required by university)
a. Submit Travel Request to workflow (i.e. Save & Send for Approval)
b. Approval via workflow
c. Post trip to Financial Accounting (automated process)
2. Start Travel Expense Report for Travel Request created in Step 1 (prior to start of trip)
a. Submit Travel Expense to workflow (i.e. Save & Send for Approval)
b. Approval via workflow
c. Post trip to Financial Accounting (automated process)
d. Create invoice in Accounts Payable via FB60
i. This is only required for prepayments made to a third party
e. Issue Payment via F110
f. Clear the prepaid account (automated process)
i. This is only necessary for prepayments made to a third party
3. Complete Travel Expense Report that was started in Step 2 (upon return from trip)
a. Submit Travel Expense to workflow (i.e. Save & Send for Approval)
b. Approval via workflow
c. Post trip to Financial Accounting (automated process)
d. Issue Payment via F110
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
EXAMPLE
Employee creates a Travel Request (this is not required; a prepaid can be processed without a Travel Request)
When the Request is Saved and Sent for Approval, the commitment in Funds Management is statistical.
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Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
When the Request is Approved, the commitment in Funds Management becomes real.
EXAMPLE 1
Conference Registration ($300) will be prepaid to the employee
To start a Travel Expense Report prior to the actual trip, go to the All My Travel Requests tab from the My Trips and
Expenses overview screen and click on Create in the Expense Report column. This option will only be available once the
Travel Request is approved and posted to FI.
The Create Expense Report process will start as usual.
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
Typically, nothing will be changed on the General Data screen.
Go to the Enter Receipts screen
1) Adjust the Estimated Cost amount – This amount should be reduced by the amount being prepaid; otherwise,
commitments will be overstated in Funds Management
2) Click on New Entry and select the appropriate Expense Type for the prepaid (Conference Registration in this
example). Enter information as required for the Expense Type.
When receipt entry is complete, go to Review & Send and submit the Expense Report to workflow (Save & Send for
Approval).
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
When the Expense Report is Saved, the commitment in Funds Management remains real.
When the Expense Report is Approved, the commitment in Funds Management continues to remain real.
The Travel Expense Report will be posted to Financial Accounting (FI) after approval, creating the below entry.
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Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
This entry creates an open item in the vendor account which can then be paid via F110.
When this posting occurs, the commitment in Funds Management is reduced to $476 and an actual for $300 is posted.
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
EXAMPLE 2
Hotel ($250) will be prepaid directly to a third party vendor
Since an Expense Report was already started to pre-pay the Conference Registration, we will just Change that Expense
Report.
Go to the Enter Receipts screen
1) Again, adjust the Estimated Cost amount – This amount should be reduced by the amount being prepaid;
otherwise, commitments will be overstated in Funds Management
2) Do not make any changes to the receipt for Conference Registration as the Travel Expense Report is building
upon itself
3) Click on New Entry and select the appropriate Expense Type (X: Pd direct to vendor - Hotel in this example).
Enter information required for the Expense Type. The comment section can be used to let AP know where to
send payment.
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
When receipt entry is complete, go to Review & Send and submit the Expense Report to workflow (Save & Send for
Approval).
When the Expense Report is Saved, the commitment in Funds Management remains real ($476).
When the Expense Report is Approved, the commitment in Funds Management continues to remain real ($476).
The Travel Expense Report will be posted to Financial Accounting (FI) after approval, creating the below entry.
• Notice the credit is to “Prepaid Exp-TM Mod” rather than to an AP Vendor account
128405
Prepaid Exp-TM Mod
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
When this posting occurs, the commitment in Funds Management is reduced to $226 and an actual for $250 is posted.
In order to actually pay the third party vendor, an invoice must be manually entered in AP through FB60.
• AP can create this invoice either: 1) after they approve the Travel Expense Report requesting the
Prepaid or 2) upon noticing a Prepaid item is outstanding by monitoring the Prepaid account on a daily
basis
• In the Reference field of FB60, enter the trip number. This is very important as the Prepaid account will
be cleared based on this field.
• The debit side of the entry will be account 128405.
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Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
128405
Prepaid Exp-
Once the invoice is created in AP, the Prepaid account will be cleared (automatically by the system, daily, at a scheduled
time to be determined). Clearing will occur if the fields Reference, Business Area, and Fund subtotal to zero.
128405
Prepaid Exp-TM Mod
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PA STATE SYSTEM OF HIGHER EDUCATION
Shared Administrative System
TM – Travel Management
Process for Prepaid Expenses
Accounting entries for the above steps:
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