diff --git a/src/libs/actions/IOU.ts b/src/libs/actions/IOU.ts
index 0486792df466..ff7fa1d1d352 100644
--- a/src/libs/actions/IOU.ts
+++ b/src/libs/actions/IOU.ts
@@ -385,9 +385,25 @@ function getReceiptError(receipt?: Receipt, filename?: string, isScanRequest = t
         : ErrorUtils.getMicroSecondOnyxErrorObject({error: CONST.IOU.RECEIPT_ERROR, source: receipt.source?.toString() ?? '', filename: filename ?? ''});
 }
 
-/** Return the object to update hasOutstandingChildRequest */
-function getOutstandingChildRequest(needsToBeManuallySubmitted: boolean, policy: OnyxEntry<OnyxTypes.Policy> | EmptyObject = null): OutstandingChildRequest {
-    if (!needsToBeManuallySubmitted) {
+function needsToBeManuallySubmitted(iouReport: OnyxTypes.Report) {
+    const isPolicyExpenseChat = ReportUtils.isExpenseReport(iouReport);
+
+    if (isPolicyExpenseChat) {
+        const policy = ReportUtils.getPolicy(iouReport.policyID);
+        const isFromPaidPolicy = PolicyUtils.isPaidGroupPolicy(policy);
+
+        // If the scheduled submit is turned off on the policy, user needs to manually submit the report which is indicated by GBR in LHN
+        return isFromPaidPolicy && !policy.harvesting?.enabled;
+    }
+
+    return true;
+}
+
+/**
+ * Return the object to update hasOutstandingChildRequest
+ */
+function getOutstandingChildRequest(policy: OnyxEntry<OnyxTypes.Policy> | EmptyObject, iouReport: OnyxTypes.Report): OutstandingChildRequest {
+    if (!needsToBeManuallySubmitted(iouReport)) {
         return {
             hasOutstandingChildRequest: false,
         };
@@ -399,8 +415,9 @@ function getOutstandingChildRequest(needsToBeManuallySubmitted: boolean, policy:
         };
     }
 
-    // We don't need to update hasOutstandingChildRequest in this case
-    return {};
+    return {
+        hasOutstandingChildRequest: iouReport.managerID === userAccountID && iouReport.total !== 0,
+    };
 }
 
 /** Builds the Onyx data for a money request */
@@ -423,10 +440,9 @@ function buildOnyxDataForMoneyRequest(
     policyTagList?: OnyxEntry<OnyxTypes.PolicyTagList>,
     policyCategories?: OnyxEntry<OnyxTypes.PolicyCategories>,
     optimisticNextStep?: OnyxTypes.ReportNextStep | null,
-    needsToBeManuallySubmitted = true,
 ): [OnyxUpdate[], OnyxUpdate[], OnyxUpdate[]] {
     const isScanRequest = TransactionUtils.isScanRequest(transaction);
-    const outstandingChildRequest = getOutstandingChildRequest(needsToBeManuallySubmitted, policy);
+    const outstandingChildRequest = getOutstandingChildRequest(policy ?? {}, iouReport);
     const clearedPendingFields = Object.fromEntries(Object.keys(transaction.pendingFields ?? {}).map((key) => [key, null]));
     const optimisticData: OnyxUpdate[] = [];
 
@@ -819,15 +835,10 @@ function getMoneyRequestInformation(
         iouReport = allReports?.[`${ONYXKEYS.COLLECTION.REPORT}${chatReport.iouReportID}`] ?? null;
     }
 
-    // Check if the Scheduled Submit is enabled in case of expense report
-    let needsToBeManuallySubmitted = true;
     let isFromPaidPolicy = false;
     if (isPolicyExpenseChat) {
         isFromPaidPolicy = PolicyUtils.isPaidGroupPolicy(policy ?? null);
 
-        // If the scheduled submit is turned off on the policy, user needs to manually submit the report which is indicated by GBR in LHN
-        needsToBeManuallySubmitted = isFromPaidPolicy && !policy?.harvesting?.enabled;
-
         // If the linked expense report on paid policy is not draft and not instantly submitted, we need to create a new draft expense report
         if (iouReport && isFromPaidPolicy && !ReportUtils.isDraftExpenseReport(iouReport) && !ReportUtils.isExpenseReportWithInstantSubmittedState(iouReport)) {
             iouReport = null;
@@ -967,7 +978,6 @@ function getMoneyRequestInformation(
         policyTagList,
         policyCategories,
         optimisticNextStep,
-        needsToBeManuallySubmitted,
     );
 
     return {
@@ -1234,11 +1244,21 @@ function getUpdateMoneyRequestParams(
     }
     updatedMoneyRequestReport.cachedTotal = CurrencyUtils.convertToDisplayString(updatedMoneyRequestReport.total, transactionDetails?.currency);
 
-    optimisticData.push({
-        onyxMethod: Onyx.METHOD.MERGE,
-        key: `${ONYXKEYS.COLLECTION.REPORT}${iouReport?.reportID}`,
-        value: updatedMoneyRequestReport,
-    });
+    optimisticData.push(
+        {
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT}${iouReport?.reportID}`,
+            value: updatedMoneyRequestReport,
+        },
+        {
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT}${iouReport?.parentReportID}`,
+            value: {
+                hasOutstandingChildRequest:
+                    iouReport && needsToBeManuallySubmitted(iouReport) && updatedMoneyRequestReport.managerID === userAccountID && updatedMoneyRequestReport.total !== 0,
+            },
+        },
+    );
     successData.push({
         onyxMethod: Onyx.METHOD.MERGE,
         key: `${ONYXKEYS.COLLECTION.REPORT}${iouReport?.reportID}`,
@@ -3019,6 +3039,13 @@ function deleteMoneyRequest(transactionID: string, reportAction: OnyxTypes.Repor
                 [reportPreviewAction?.reportActionID ?? '']: updatedReportPreviewAction,
             },
         },
+        {
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT}${chatReport?.reportID}`,
+            value: {
+                hasOutstandingChildRequest: iouReport && needsToBeManuallySubmitted(iouReport) && updatedIOUReport?.managerID === userAccountID && updatedIOUReport.total !== 0,
+            },
+        },
     );
 
     if (!shouldDeleteIOUReport && updatedReportPreviewAction.childMoneyRequestCount === 0) {