I am looking for some advice on how best to handle a pre-paid grant/contract where the pre-paid amounts and events are not known at the time of grant setup. Thus, the grant/contract have been set up as a typical cost-reimbursable grant/contract.

My understanding from the client is that the grant sponsor contacts them throughout the grant and asks them to submit a billing for costs that have not yet occurred if there is a chance the grant sponsor would not able to pay promptly if they waited until the costs had occurred and the client submitted the billing after the fact (for example the possibility of a government shutdown). However, most of the costs for the grant are still billed to the sponsor after occurring.

For example, the grant may look something like this:

Start and end dates: 7/1/2024 - 6/30/2026

Grant is a traditional cost-reimbursable with billing actual costs after the fact through 12/31/2024. Then the grant sponsor may ask the client to bill $10,000 on 1/1/2025 for a specific grant component where costs have not yet occurred but are anticipated. The rest of the grant is anticipated to be billed after the fact. Fast forward to Sept 2025, and the sponsor may again ask the client to bill $10,000 for anticipated costs that have not yet occurred. This $10,000 payment may only be for a specific part of the grant - perhaps a specific subcontract - and would not be applied to costs for other parts of the grant even during the Sept/Oct time frame. Those other costs would still be billed after the fact.

Ideally, how would a grant like this be set up and managed so that revenue is correct?

Also, does anyone have any suggestions on how best to manage this given that the grant and contract have already been set up as a traditional cost reimbursable without a pre-paid contract line?

Thanks!

Hi Michele,

The scenario you describe can be handled in the system (Contracts). Crucial point here is that either cost-reimbursement or pre-paid, they both have the same pricing method which is, 'as incurred'.

If sponsor pays upfront some funding and then requires billing (invoices) for subsequent payments, you can set up the contract as cost-reimbursement with contract limit same as the contract value and then enter one prepaid event for the amount they will pay w/o cost-incurred).

When expenses are hitting the ledger/project costing then at the beginning you run utilization to exhaust the pre-paid value. When the prepaid is depleted, system will generate a debit invoice which can be sent to sponsor. That's how you can continue and introduce another prepaid if sponsor is willing to do so down the road.

Hope this helps a little to envision the process.

Regards,

Armand