Expense Types and Payment Types

When creating expense transactions, it is very important to select the right combination of Expense Type and Payment Type.  Selecting the right combination allows the SMART system to generate the appropriate accounting entries.  Selecting an improper combination will result in either a positive or negative Prepaid account balance which will have to be corrected on a separate transaction.  Following are some guidelines and examples for selecting the correct combination:

Regular Expense Types


To achieve the proper accounting impact, 'Regular' Expense Types should be used with the 'Cash' Payment Type.

Below is a list of the 'Regular' Expense Types in SMART:
Image showing regular expense types, which are expense types that do not begin with PRPD and should be used with a payment type of Cash

Accounting Entries generated for 'Regular' Expense Types:

Correct Entry

First, we will look at a correct accounting entry that was created when a 'Regular' Expense Type was selected along with the 'Cash' Payment Type.  The first line debits the expense account (525110).  The second line is a system-generated line which credits the expenses payable account (220100).

Review these entries on the 'Expense Report Acctg Entries page':
From the Home page in SMART, click the 'Travel and Expenses' link on the left navigation menu, then click 'Manage Accounting', then click 'View/Adjust Accounting Entries', and then click the 'Expense Report Acctg Entries' link.


Image of the Expense Report Accounting Entries page for a correct entry

Incorrect Entry

Next, we will look at an incorrect entry where a 'Regular' Expense Type was selected with the 'PCard Lodging' Payment Type.  The first line debits the expense account (525280).  The second line is a system-generated line which credits the prepaid account (140300).  This will cause a credit balance to remain in the prepaid account (140300) and will require correcting entries to be entered into the system.


Image of the Expense Report Accounting Entries tab showing an incorrect Entry

It is very important to note that any expense line with a payment type of 'PCard Airfare', 'PCard Lodging' or 'PCard Other' will not produce a reimbursement to the employee.

Prepaid Expense Types


To achieve the proper accounting impact, 'Prepaid' Expense Types should be used with the 'PCard Airfare', 'PCard Lodging' or 'PCard Other' Payment Type
Below is a list of the 'Prepaid' Expense Types in SMART':
Image showing prepaid expense types, which are expense types that begin with PRPD and should be used with a payment type of PCard Airfaire, PCard Lodging or PCard Other

Accounting Entries generated for 'Prepaid' Expense Types:

 

Correct Entry

First, we'll look at accounting entries that were created when a 'Prepaid' Expense Type was correctly selected along with the 'PCard Lodging' Payment Type.  The first line debits the prepaid account (140300).  The second line is a system-generated line which credits the prepaid account (140300).


Review these entries on the 'Expense Report Acctg Entries page':

From the Home page in SMART, click the 'Travel and Expenses' link on the left navigation menu, then click 'Manage Accounting', then click 'View/Adjust Accounting Entries', and then click the 'Expense Report Acctg Entries' link.

Expense Report Accounting Entries tab for the Prepaid example showing the correct entry

Incorrect Entry

Next, we'll review an incorrect entry where a 'Prepaid' Expense Type was selected along with the 'Cash' Payment Type.  The first line debits the prepaid account (140300).  The second line is a system-generated line which credits the expenses payable account (220110).  This will cause a debit balance to remain in the prepaid account (140300) and will require correcting entries to be entered into the system.


Expense Report Accounting Entries tab for Prepaids showing an incorrect Entry

Please note that, even though a 'Prepaid' Expense Type was selected, reimbursement was made to the employee because the 'Cash' Payment Type was selected.