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Administrator Guide
Last Updated: 2025-03-14
Steps: Set Up Prepaid Supplier Spend

Steps: Set Up Prepaid Supplier Spend

  • Configure these business processes and security policies in the Suppliers functional area:
    • Prepaid Spend Amortization Event
      .
    • Prepaid Spend Amortization Schedule Event
       for the
      Schedule
       prepaid amortization type.
    • Receipt
       in the Procurement functional area.
      Include the
      Create Supplier Invoice from Receipt
       action step to amortize after receipts are settled and paid.
  • Set up the
    Prepaid Spend
     account posting rule.
  • Define journal sources and transactions, account posting rules, and additional commitment accounting requirements.
To procure goods and services in accounting periods that occur before the periods when spend is amortized, you can define one of these 3 prepaid specifications on invoices or purchase orders:
  • Manual: Available for selection on purchase orders and invoices. When you create an invoice with the Prepaid Amortization Type as Manual, you can only amortize it after you pay the invoice. Once you pay the invoice, access the related actions of the supplier invoice and select
    Supplier Invoice
    Create Prepaid Spend Amortization
    . Select the accounting date to create an operational transaction to post the amortization.
  • Receipt: Available only for selection on purchase orders and purchase order invoices. To amortize receipts, you must enter the invoice before recording the receipt. Workday amortizes the amount of each receipt that you record. Example: If you receive an invoice of $1000.00 in 2 receipts of $500.00 each, Workday will amortize $500.00 each time you record the receipt.
  • Schedule: Available for selection on purchase orders and invoices. See Create Amortization Schedules for Prepaid Purchase Orders.
  1. Select:
    1. Prepaid
       on purchase order lines.
    2. An
      Amortization Type
       in the
      Prepaid Details
       tab from:
      • Manual
      • Receipt
      • Schedule
    When you specify prepaid information in purchase orders, the details automatically populate supplier invoices and receipts.
  2. When you create a prepaid purchase order amortization schedule, the details persist to the prepaid supplier invoice amortization schedule.
  3. You can also create a Non-PO supplier invoice. See Create a Non-PO Supplier Invoice.
  4. (Optional) From the related actions menu of a supplier invoice, access the
    Change Prepaid Amortization Type
     task.
    You can change the prepaid amortization type on supplier invoices before you create amortizations. Invoices must be:
    • Prepaid
    • Not related to an accounting adjustment
    Security:
    Process: Supplier Invoice – Prepayments
     domain
  6. Use an accounting adjustment to reclassify supplier invoices to prepaid. You can manually amortize prepaid installments or create amortization schedules for prepaid accounting adjustment transaction lines.
Workday posts operational accounting to ledger accounts you define in the
Prepaid Spend
 account posting rule. New accounting credits the account used by the
Prepaid Spend
 posting rule and debits the account used in the
Spend Account
 posting rule.
Your organization prepays supplier invoices:
  • For an annual event before the accounting period of the event, and amortizes spend when the event occurs.
  • For an annual insurance policy to receive a supplier discount and amortize it monthly for 12 months, rather than accounting for it all in January.
  • By a recurring schedule for a lease you pay quarterly and amortize monthly.
  • In the
    Prepaid Details
     tab:
    • View accounting information in the prepaid supplier invoice.
    • View prepaid purchase orders and supplier invoice schedules in each business document type.
  • View prepaid supplier invoice installments and accounting from prepaid supplier invoice schedules.