Did you miss our recent Workday FINS 2020R2 Update webinar? We’ve got you covered. Discover all the great new features and functionality you can expect within Financial Accounting, Common Financial Management, and Tax, in this new guide written by our Workday Fins expert Aíne McElhinney.
Financial Accounting: Certification & Decertification
The first Workday Fins 2020R2 update worth mentioning is in Financial Accounting—specifically in the area of Account Certification. Following on from the enhancements released in 2020R1, Account Certifications has made the spotlight again in this release with features that will assist efficiency in your period close.
For those who are not familiar with this functionality, Account Certification is a process – which you can build into your period close – that manages the preparation, review, and approval of your ledger accounts in Workday. 2020R1 saw some great improvements in this area, including the account certification dashboards and the introduction of Worksheets.
With the Workday Fins 2020R2 release, the Account Certification efficiency is expanding to handle account decertification—meaning users will be able to schedule an automated process to decertify previously approved account certs, that since have had ledger activity or ledger account balance changes. The automation of this can be ran on the current and prior period. You can also manually decertify on periods preceding the prior period by taking a related action.
Previously, customers needed to cancel and re-initiate an account certification BP. The two processes were independent of each other and the documentation between the two could not be directly linked. This new feature will solve for this by having one fully auditable business process that tracks all actions taken on a certification. Here, we can see the status audit trail of this certification through its lifecycle—being approved, to rescinded by decertification, and back to approved again.
Another benefit to this new feature is that it will allow customers to begin their close process early, with the assurance that, if balance changes, or activity has occurred after a cert was approved, then the certification would be routed to the original reconciler on the way back through the approval process. This will improve efficiency as all the preparer’s original work (including worksheets, attachments, and comments) will be preserved while recertifying.
As part of this update, there are several new reporting features which will assist in both auditing Account Certifications as well as analysing the data within a ledger account.
- On the ‘Find Account Certifications’ report, Workday is introducing a ‘Ledger Balance Variance’ column, enabling customers to view the change in the account balance since the account was certified.
- Workday is introducing a new report called ‘Find Decertified Certifications’ which easily pulls all decerts—past, present, or those in progress.
- And another new report coming with this release is the ‘Decertification Details Report’, which displays post-certification activity in a drillable format, allowing users to easily access the journals posted after certification.
This is another huge improvement to this functionality, following on from the previous two update releases, creating even greater efficiencies in the close process in Workday by allowing for visibility and control over changes. It could result in some Workday users taking the plunge and incorporating Account Certifications in Workday – allowing for the retirement of third-party systems that may currently handle this functionality – resulting in less integrations and one system of data.
Policies and Procedures for Account Certification Definitions
Staying in the area of Account Certifications, another new Workday Fins 2020R2 feature is the ability to store Policy, Purpose, and Procedure information on Account Certifications. This feature will now allow both internal teams and external auditors to identify and understand the policy, purpose, and/or procedure of an account certification within Workday. This is another efficiency improvement, removing the need for users to go off-system for additional information.
You can see in this screenshot above where this would appear on an account certification and where users can access this information directly from the cert.
On the Policy Purpose and Procedure area, customers can store their information directly as well an embed URLs. Also, effective dates are maintained and stored against the document.
A Policy document can be shared across multiple account certifications; so, for example, if you have two different entities that have their accrued liabilities certified, in two separate certification sets, they can share the same document. Customers can edit existing account certifications and add a newly created policy, purpose, and procedure documentation.
Currency Conversion Rates
Prior to this release, when maintaining currency conversion rates, Workday accepted currency updates with a rate of zero through both manual entry and through web service. With this release, Workday will require you to enter a positive, non-zero number. In the screenshot below, you can see the critical error and message informing the user that they must provide a non-zero number for the currency rate.
This is a small update but removes the risk of incorrect processing and subsequently incorrect revaluation and translated reporting. This validation applies to the web services of Put and Import currency conversion rates as well through User Interface.
There are a couple of new Workday Fins 2020R2 features which will allow customers to better control and track Accounting Adjustment activities. The accounting adjustments process is used to reclassify costs on one of these four, settled transactions:
- Expense report
- Procurement card transaction
- Supplier invoice
- Supplier invoice adjustment
Until this release, the Accounting Adjustment business process did not notify the initiator or approvers (if there are any) that a period was not open. So, although the transaction would complete, the journal would error and quite likely only be noticed when running the Fix Operational Journals in Error Task at period close.
The first new feature in this area is date validation, which is commonly seen on other accounting transactions in Workday such as the manual ‘Create Journal’. This is a soft warning informing the inputter if the selected date is not in an open period for posting this type of journal. If a user proceeds with the date, the validation will remain on the business process while routing for approval. This is a small but effective update that will remove a frustration in this area that could slow down period close and cause issues in reporting.
Memo on Operational Transactions
Another great new feature on the Accounting Adjustments business process is the opportunity to provide additional detail on each line of an accounting adjustment. Until this release, to provide information as to why an adjustment is being posted, users would have to add an attachment for justification, as well as selecting a Change Reason.
There is now a new memo field which allows for insight on accounting adjustments in free-text form and is displayed on the View Accounting Adjustment report. The introduction of this new field will make it easier for both internal teams and auditors to understand the reason for an adjustment.
Alternate Ledger Account and Summaries
2020R2 sees the introduction of the built-in prompt ‘Alternate Ledger Account and Summaries’ on the ‘Journal Lines for Financial Reporting’ data source. On custom reports, customers will be able to leverage this prompt and more efficiently access their data through alternate ledger accounts and& summaries as opposed to the primary account set only. Users will need to edit the prompts tab of custom report definitions to display this prompt at runtime.
This update will greatly benefit localised accounting teams who often transact and report on the alternate COA within Workday.
Amending Transactions included in Tax Declaration
There are some beneficial new and improved features within Tax for Workday Fins 2020R2. The first update is the ability to now amend or cancel transactions that are already included in a tax declaration. Until now, transactions included in a tax declaration, such as a supplier invoice, could not be cancelled. Workarounds were used by creating adjustments to negate the original transaction, however, users were finding this ‘clogged’ their suppliers accounts in Workday with additional adjustments that were only posted to correct things like keying errors.
Workday now enables the change or cancellation of transactions that have already been included in a tax declaration. This makes it much easier for users to correct mistakes without needing to post many invoice adjustments. Note the impact of changes made to supplier invoice 16875, which was already included in an approved tax declaration, in the image below.
An update was made to the tax rate on the supplier invoice and so the original posting has reversed, as seen in the middle two lines. The other two lines are the result of the update made to the supplier invoice. Change and cancelation actions are available on Supplier Invoices and Invoice Adjustments as well as Customer Invoices and Invoice Adjustments.
Tax Reporting on Journal Lines
The final Tax-related feature to mention is tax reporting for journal lines. With this release, Workday enables you to link tax lines and taxable event journal lines for accounting journals while uploading accounting journals through EIB. This simplifies tax reporting and account reconciliation activities and helps comply with SAF-T requirements.
In the screenshot below, we can see how the EIB journal looks in Workday on a custom report that includes the Line Tax Rate Application. We can see how the £40 VAT receivable line has pro-rated against lines A & B, as this was specified on the EIB.
This feature is automatically available on the Submit Accounting Journal and Import Accounting Journal within integrations and EIB. However, you may need to generate a new template for your EIBs to populate the Taxable Event Line Reference, seen on the right side of the excel screenshot.
An important consideration to note is you must manage any changes or amendments to accounting journals that reference a taxable event through EIB. Editing a journal through the Workday interface will remove any mapping between the tax line and the taxable event lines.