diff --git a/src/libs/NextStepUtils.ts b/src/libs/NextStepUtils.ts
index 4016e2418a50..575cb08c6520 100644
--- a/src/libs/NextStepUtils.ts
+++ b/src/libs/NextStepUtils.ts
@@ -97,6 +97,16 @@ function buildNextStep(report: OnyxEntry<Report>, predictedNextStatus: ValueOf<t
     const type: ReportNextStep['type'] = 'neutral';
     let optimisticNextStep: ReportNextStep | null;
 
+    const noActionRequired = {
+        icon: CONST.NEXT_STEP.ICONS.CHECKMARK,
+        type,
+        message: [
+            {
+                text: 'No further action required!',
+            },
+        ],
+    };
+
     switch (predictedNextStatus) {
         // Generates an optimistic nextStep once a report has been opened
         case CONST.REPORT.STATUS_NUM.OPEN:
@@ -125,6 +135,12 @@ function buildNextStep(report: OnyxEntry<Report>, predictedNextStatus: ValueOf<t
                 ],
             };
 
+            if (!PolicyUtils.arePaymentsEnabled(policy)) {
+                optimisticNextStep = noActionRequired;
+
+                break;
+            }
+
             // Scheduled submit enabled
             if (harvesting?.enabled && autoReportingFrequency !== CONST.POLICY.AUTO_REPORTING_FREQUENCIES.MANUAL) {
                 optimisticNextStep.message = [
@@ -216,16 +232,10 @@ function buildNextStep(report: OnyxEntry<Report>, predictedNextStatus: ValueOf<t
         }
 
         // Generates an optimistic nextStep once a report has been closed for example in the case of Submit and Close approval flow
+        // or when a report has been paid
         case CONST.REPORT.STATUS_NUM.CLOSED:
-            optimisticNextStep = {
-                icon: CONST.NEXT_STEP.ICONS.CHECKMARK,
-                type,
-                message: [
-                    {
-                        text: 'No further action required!',
-                    },
-                ],
-            };
+        case CONST.REPORT.STATUS_NUM.REIMBURSED:
+            optimisticNextStep = noActionRequired;
 
             break;
 
@@ -241,15 +251,8 @@ function buildNextStep(report: OnyxEntry<Report>, predictedNextStatus: ValueOf<t
                     report,
                 )
             ) {
-                optimisticNextStep = {
-                    type,
-                    icon: CONST.NEXT_STEP.ICONS.CHECKMARK,
-                    message: [
-                        {
-                            text: 'No further action required!',
-                        },
-                    ],
-                };
+                optimisticNextStep = noActionRequired;
+
                 break;
             }
             // Self review
@@ -281,21 +284,6 @@ function buildNextStep(report: OnyxEntry<Report>, predictedNextStatus: ValueOf<t
             };
             break;
 
-        // Generates an optimistic nextStep once a report has been paid
-        case CONST.REPORT.STATUS_NUM.REIMBURSED:
-            // Paid with wallet
-            optimisticNextStep = {
-                type,
-                icon: CONST.NEXT_STEP.ICONS.CHECKMARK,
-                message: [
-                    {
-                        text: 'No further action required!',
-                    },
-                ],
-            };
-
-            break;
-
         // Resets a nextStep
         default:
             optimisticNextStep = null;
diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 3d016fab713d..747112601617 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -4440,6 +4440,35 @@ function buildOptimisticInvoiceReport(chatReportID: string, policyID: string, re
     };
 }
 
+/**
+ * Returns the stateNum and statusNum for an expense report based on the policy settings
+ * @param policy
+ */
+function getExpenseReportStateAndStatus(policy: OnyxEntry<Policy>) {
+    const isInstantSubmitEnabled = PolicyUtils.isInstantSubmitEnabled(policy);
+    const isSubmitAndClose = PolicyUtils.isSubmitAndClose(policy);
+    const arePaymentsDisabled = policy?.reimbursementChoice === CONST.POLICY.REIMBURSEMENT_CHOICES.REIMBURSEMENT_NO;
+
+    if (isInstantSubmitEnabled && arePaymentsDisabled && isSubmitAndClose) {
+        return {
+            stateNum: CONST.REPORT.STATE_NUM.APPROVED,
+            statusNum: CONST.REPORT.STATUS_NUM.CLOSED,
+        };
+    }
+
+    if (isInstantSubmitEnabled) {
+        return {
+            stateNum: CONST.REPORT.STATE_NUM.SUBMITTED,
+            statusNum: CONST.REPORT.STATUS_NUM.SUBMITTED,
+        };
+    }
+
+    return {
+        stateNum: CONST.REPORT.STATE_NUM.OPEN,
+        statusNum: CONST.REPORT.STATUS_NUM.OPEN,
+    };
+}
+
 /**
  * Builds an optimistic Expense report with a randomly generated reportID
  *
@@ -4466,10 +4495,7 @@ function buildOptimisticExpenseReport(
     const formattedTotal = CurrencyUtils.convertToDisplayString(storedTotal, currency);
     const policy = getPolicy(policyID);
 
-    const isInstantSubmitEnabled = PolicyUtils.isInstantSubmitEnabled(policy);
-
-    const stateNum = isInstantSubmitEnabled ? CONST.REPORT.STATE_NUM.SUBMITTED : CONST.REPORT.STATE_NUM.OPEN;
-    const statusNum = isInstantSubmitEnabled ? CONST.REPORT.STATUS_NUM.SUBMITTED : CONST.REPORT.STATUS_NUM.OPEN;
+    const {stateNum, statusNum} = getExpenseReportStateAndStatus(policy);
 
     const expenseReport: OptimisticExpenseReport = {
         reportID: generateReportID(),