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Administrator Guide
Last Updated: 2025-10-31
Steps: Set Up Prepaid Installments for Automatic Consumption

Steps: Set Up Prepaid Installments for Automatic Consumption

To simplify billing, Workday enables you to bill your sponsor by installment but recognize revenue at the time of cost reimbursable expense. You can set up this automatic consumption of prepaid installments by creating an
Installment
 billing schedule with a
Prepaid Billing
 schedule type and associating it with a
Cost Reimbursable
 award line. You can create multiple billing schedules for the same award. Each billing schedule can have its own award line, or you can have multiple award lines on the same schedule.
  1. Access the
    Maintain Schedule Types
     task.
    Create a
    Prepaid
     billing schedule type and select the
    Prepaid
     and
    Billing
     check boxes.
    Security:
    Set Up: Customer Contracts
     domain in the Customer Contracts and Project Billing functional areas.
  2. Configure the award line to use for prepaid installments with:
    • The lowest award line number.
    • The
      Cost Reimbursable
       line type.
    • Award line worktags, when you enable worktag balancing. Example: Fund worktag.
  3. Create a new
    Installment
     billing schedule, and select
    Prepaid Billing
     as the
    Schedule Type
    .
    Generate installments for the billing schedule.
    To prevent the need to clear accounts receivable entries with manual accounting journals, we recommend that you:
    • Select the
      Do Not Bill Over Installment Total
       check box.
    • If multiple lines share the same billing schedule, generate installments only for the line with the lowest number.
      After you submit your billing schedule, Workday displays the line with the lowest number in the
      Award Line for Prepayment Accounting Worktags
       field. Workday uses the worktags on this line to generate prepaid accounting.
    You can clear the
    Do Not Bill Over Installment Total
     check box after you've consumed the prepaid amount, enabling you to bill amounts over the installment total as cost reimbursable spend. Workday creates accounts receivable entries for this spend.
  4. Create sponsor invoices for the installments on your billing schedule by selecting
    Billing Installment
    Create Customer Invoice
     from the related actions menu of the installments you want to bill. Workday generates invoices and intercompany journal entries for both the award header company and the award line company on the billing installments that you select. On the sponsor invoices for the prepaid installments, Workday:
    • Debits
      Accounts Receivable
      .
    • Credits
      Deferred Revenue
      .
  5. When you receive payment from the sponsor, Record Customer Payments.
    Workday:
    • Debits
      Cash
      .
    • Credits
      Accounts Receivable
      .
When you spend against a prepaid award and complete the transaction, Workday:
  • Debits
    Unbilled Accounts Receivable
    .
  • Credits
    Grants Revenue
    .
When you create sponsor invoices for the cost reimbursable transaction, Workday:
  • Consumes the prepaid balance from complete installments.
  • Displays a
    Prepaid Details
     section on the billing schedule.
  • Debits
    Deferred Revenue
    .
  • Credits
    Unbilled Accounts Receivable
    .
To review the prepaid accounting, you can select
Accounting
View Accounting
 from the related actions menu on the sponsor invoices.