Thank you for confirming that this is how the system works.

I am a bit disappointed because we do invoice customers on the spot and they are often paid immediately too, and we run payroll for ourselves monthly.

I am still unclear about whether or not I will be able to apply billable time to a paid invoice after the fact. If that is possible then I suppose that is the only solution to use this feature in my situation.

I think I will be submitting a feature suggestion to have the option to approve time and expenses without closing out the payroll period.