Year-End for Financials
In this issue of In The Loop, Stormloop is continuing our Financials Series with a focus on year-end close in Workday. Year-end is right around the corner and the team here at Stormloop would like to share some best practices that work well for us as we help manage Workday in production for our clients. Whether this is your first year-end within Workday or you’ve been through this many times already, we’d like to share some tips and tricks that can help you and your teams hit the ground running.
Year-end for Workday Financials
Preparing your Workday tenant for year-end will help ensure processes do not break down in production. It’s important to have a year-end checklist that is tailored to your specific implementation of the platform. We recommend building a baseline checklist, iterating on it as the year progresses, then use it over and over again for each year-end cycle.
Your tenant configuration may change on a regular basis. You may have managed some M&A transactions throughout the year or expanded internationally into new countries, which changes the landscape of what to look for at year-end. More than anything, it’s a good idea to be prepared so you don’t run into any roadblocks. Q4 is the busiest and shortest quarter of the year for most companies; being proactive about tenant preparation allows you to avoid production emergencies during this critical time.
Year End Checklist Flow
When building out a year-end checklist we like to start with the basics. Are the next ledger year and periods already created in your tenant? Has the next ledger year been tied to the Actuals ledger for all of your operating companies? If not, these are the first few tasks that belong on your checklist. There are cross-application impacts to the Payroll functional area if these tasks are not completed in a timely manner. We like to start looking at year end tasks at the beginning of Q4 so by the time we’ve actually made it to year-end, all the tasks have been completed and there’s nothing to carry over into the new fiscal year.
Year-end is also a great time to review your asset book rules, supplier accounts match rules and rule sets, global mileage rates, and transaction tax configuration to see if any updates need to be made or if brand new configuration needs to be created in order to support changing business requirements. Update your spend transaction instructions for expense reports, spend authorizations, and requisitions. If you closed any bank accounts with your financial institutions take the time to close those bank accounts in Workday. Reset all of your settlement run schedules and review your first notice rules and rule sets in order to optimize your bank reconciliation and streamline the automation.
Business process lifecycle improvements can also come up at year-end or just shortly thereafter. Updates made to your company’s approval authority matrix may impact key business processes for financials such as requisitions, supplier invoices, expense reports, and accounting journals. It’s important to take the time to reconfigure each business process in a lower environment such as Sandbox or an implementation tenant, thoroughly test each one from end to end, and make the updates in production with an effective date in the future that aligns with the date the updated policies go into effect. If you have a good process in place you should be able to quickly align your tenant configuration with changing internal policies and procedures.
Your accounting and procurement teams should also be involved with year-end tasks in Workday. They can review transactions in error or draft status and clean up anything that looks like it will impair your ability to close the period, will never be submitted, or should be closed out for the fiscal year. By using the Mass Close Procurement Documents business process you can close out requisitions, purchase orders, and supplier contracts that are no longer valid or should be closed as part of year-end maintenance. If your company utilizes Inventory or Supply Chain Management in Workday you may want to perform a year-end count to true up your inventory.
Your accounting team can roll forward the year-end balance as soon as they’re ready and this task can be completed over and over if adjustments need to be made before you officially close the last period of your fiscal year. Some tenant preparation may be involved here as well, depending on your specific system configuration. Finally, close the ledger year once all close activities and adjustments have been made for the last period of the prior fiscal year. All periods in the ledger year must be in a status of closed before you can close the ledger year. This should be the last task on your checklist.
Year end reporting and Q1 audit preparation
Reporting is a large component of year-end financial activities within Workday. While financial statements are obvious components of year-end reporting, other reports can be crucial elements of the year-end process. These secondary reports can serve as additional information provided to leaders or external parties, or they can serve as audit reports that address individual pain points for the organization.
First and foremost, ensuring that financial statements are accurate and easy to audit should be an area of focus well in advance of year end. Even if your financial statements have been utilized by your organization for a while, the natural evolution of your FDM creates an ongoing need to revisit the construction of these reports. A good example would be revisiting the operating revenue section of your income statement to ensure that any changes in your revenue categories or revenue category hierarchies have been accounted for.
Audit Reports are able to complement and enable the maintenance of your financial reports by providing a quick and focused view into which elements of your FDM have evolved throughout the year and how these new or changed items are set up.
Need help with creating your own year-end checklist for Workday Financials? The Services team here at Stormloop can help.
Contact us at info@stormlooptech.com to learn more.
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