Banking Series: Payment Integrations
Our next issue of In the Loop has arrived!
We’re thrilled to present a banking integration outline to best integrate your financial institutions with Workday Financials for payments and bank reconciliation processes.
To start your banking integration journey, we’ve prepared the below questions.
Why would I integrate Workday with a bank?
Almost all banks support payment and bank reconciliation integrations. For treasury and accounts payable, automating these transmissions can provide more scalable processes to support business growth.
Some big wins from building these integration include:
- Your vendors and employees will receive payments faster and with more remittance detail
- Accounts payable will more comfortably run Workday settlements without needing to take additional manual action such as uploading bank payment templates directly to the bank’s portal
- Treasury will receive bank statements for reconciliation before starting their day to tie out banking transactions with ease and efficiency
- These connections are also extremely secure with encryption and host-to-host connectivity, so they often better fulfill clients’ audit and security requirements
In this post, we share some advice to start your journey with banking integrations.
Step 1 - Engage the financial institution
When you begin to see the potential to integrate Workday with a financial institution, it is recommended that you contact your representative at that institution to inform them of this interest. The representative will typically set up a call to talk through options and pricing for what you’re trying to accomplish.
It’s very important to give the bank as much notice as early as possible because there are often significant amounts of paperwork for initiating a new project. Additionally, banks sometimes require significant time to assign an implementation team or project manager to a new project.
We recommend reaching out to your financial institution six weeks before you want to start the project. This time should be plenty for both your team and the bank team to align resources appropriately. We’d like to specifically call out the end of a calendar quarter, especially Q4, where you may experience delays or extended timelines when working with banking contacts.
Step 2 - Define scope and project timeline
After the initial bank conversations regarding high-level integration options, the next step is to define the project scope by clearly identifying the project inventory and requirements.
Listed below are some of the deliverables during the design and scoping sessions.
Countries & Currencies - Are the bank accounts to be integrated domiciled only in the United States? If not, what other countries will be part of the project or could be included in a future rollout?
Payments Currency Definition - Are payments made only in the account currency, or do we need to send payments to other countries and their local currency?
Payment Types - What payment types do you want to send from Workday? Keep in mind that you can still leverage the bank portal to initiate payments once Workday is integrated; however, Workday can be built to handle several payment types such as wires, non-urgent payments, like ACH, and even local payments around the world such as the GIRO payment in Asia or SEPA payment in Europe.
Formats - Once the specifications from the bank are received, work with your Workday integrations team to finalize the file formats to be used as part of the project. Financial transactions and reconciliation are done through globally-accepted file formats. The format used may have some implications on payment, remittance, or reconciliation, so we invite you to have these conversations with your Workday team so that prototypes can be completed before you commit to the file format with the bank.
Waved deployment approach? - Due to client team size as well as the functional and technical work involved in a banking project, we often see clients take a waved approach to a banking rollout. This means rolling out either one country, region, or payment type at a time and expanding as each wave stabilizes to the next one this allows for things to get automated very quickly where there is priority or high volume.
Connectivity - We invite you to share a more technical discussion with the bank surrounding file security and transfer protocols. This includes leveraging a bank sFTP as well as a PGP key pair for encryption.
Check out this diagram below to better exemplify the file flow:
Step 3 - Identify internal players & testing logistics
Project Manager - The project manager is typically assigned by the bank’s implementation team, but we recommend having a project manager internally, as well, to assist with tracking in progress and reporting to internal stakeholders. The bank’s project manager typically orchestrates a weekly call to discuss progress, and the internal project manager can set an internal client call to meet internally to discuss testing in development without the bank present.
Developer/Consultant - Who is going to set up the bank accounts? Who is going to set up the bank routing rules? Who is going to build the integration that takes Workday’s payment data and transforms it into the bank's specifications? These are all questions that need to be answered prior to starting the project so that you can accurately put together a project schedule based on resources’ availability and responsibility.
Tester - The accounts payable team should enter in the real invoices using real data for testing with the bank to ensure that the data integrity is strong and will successfully integrate with the bank’s system. The integration developer is not the recommended final tester beyond basic unit testing.
Bank Contact - Who in the bank is responsible for reviewing and providing feedback on the files? It is important to hit a consistent basis and ask this team member to provide feedback in a timely and consistent manner.
Identify Tenant - it is important that you pick a tenant that won’t be refreshing during the course of the project. There’s a great deal of functional components that make it very difficult to reconfigure in a new environment. Pick a tenant that will not be refreshed for the first week of the project. This tenant can also be a Preview tenant, as well.
Step 4 - Weekly Meeting Cadence & Attendance
Most banks will require a weekly meeting to discuss development and progress. It is recommended that the entire team attend this meeting to cover action items and next steps to keep the schedule moving forward. These meetings are an opportunity to review the technical files with the entire team to identify and sort out any data discrepancies or technical questions as it relates to Workday functionality. The payment files are only as clean as the Workday data, and each integration should see a successful run during the early testing phases.
Testing Note:
It’s important that testing is tracked and organized across the project. Ensure the test scenarios are representative of production activity. For instance, if you wire a vendor in the United Kingdom, paying this vendor should be included in your testing. Banks may take 3-5 days to review test files, so it’s extremely important that testing is discussed on the weekly call to move things forward and reminding on schedule. We will often bring up the file specifications or test files live on the call to discuss clarifications with the bank’s technical resource.
Step 5 - Cutover & Penny Testing
Your test scenarios are now complete and have been reviewed and signed off by your AP and/or payroll team. Your bank statements are loading into your test environment, and your reconciliation rules & configuration are sufficient for the treasury’s requirements.
What’s next?
Coordinating cutover with the bank takes time and should not be sudden or unplanned. Banks have several blackout periods throughout the calendar year and may require up to 4 weeks to prepare their production sFTP and host-to-host environment. If at any time the team thinks Go-Live may be before or behind schedule, please bring this up with the bank on a weekly call or email as soon as you can. Otherwise, you risk encountering delays in rescheduling due to lack of notice.
When approval is received from the bank, your Workday technical resource will work with the bank’s connectivity analyst to install any connection or encryption keys associated with the transmission. Some banks require additional signatures or approvals, so be prepared to identify a “key manager” amongst your team for future expirations or installations. This process may take up to 1 week.
In parallel to the connectivity, the Workday technical resource should migrate the integrations to Production and work with your Treasury team to configure the relevant integrations on the correct bank accounts with the appropriate payment types. This functional setup, including the bank routing rules, should be double checked live on a call with treasury, AP, and payroll, if applicable. If this is not configured correctly, the integration may not run or, worse, run at the wrong time. Double check!
Here is a list of Workday Business Processes you’ll want to include in your overview:
Settlement Release Event
Payment Release Event
Outsourced Payment Release Event
Remittance Release Event
Now, you’re ready for the penny test.
We recommend settling one payment per payment type to confirm the following:
Connection to the bank’s server
Successful decryption on the bank side
Correct account configuration in Workday
Complete and accurate remittance being passed to the payee
Funds received in payee account
This sanity check is the final checkpoint before incorporating this integration suite into your regular settlement routine. Make sure you have enough time to run each payment through this process entirely to prevent confusion should there be any issues in the configuration.
Step 6 - Stability
Stability feels good!
Watch the integrations closely for a month after the first successful runs to ensure they remain stable and scalable to support business growth over time.
Keep your bank’s support contact information at the ready. You never know when a payee will provide incorrect banking details, the sFTP connection between Workday and the bank will have transmission issues, or payments may need to be canceled in the bank’s portal.
Remember, very few banks allow for payment cancellations via host-to-host. CANCELING A PAYMENT IN WORKDAY DOES NOT CANCEL THE PAYMENT AT THE BANK. If you cancel a payment in Workday and reinitiate the process without canceling via phone or manually with the bank, the payee will get paid twice. Lock down your processes so that payment cancellation is a simple and easy process.
Congratulations on implementing electronic payments between Workday and your bank. We look forward to hearing about your best practices and strategy or alternative approaches to successful implementations.
Please reach out to isai@stormlooptech.com with any comments or questions.
Our team is always open to sharing a conversation about your team’s direction and how we can provide more value to your Workday investment.
Next banking blog? Check printing and positive pay! Be on the lookout.
Written By: Isai Amaya-Garcia
Follow Isai here: https://www.linkedin.com/in/isaiamaya/
Follow Stormloop here: https://www.linkedin.com/company/stormloop-technologies-llc/
