Steps: Configure Commitment Accounting for Procurement

Use these high-level steps to configure commitment accounting for procurement. You can create commitments and obligations in their respective ledgers, and control spend from the originating transaction to the supplier invoice that posts actuals.

Set up the Spend Commitment Liquidation, Spend Obligation Liquidation, and Supplier Contract journal sources and transactions for accounting.

This setup enables you to:

Post commitment and obligation journal entries to your books for your spend transactions.

Map the journal sources to their corresponding transactions.

See Steps: Set Up and Update Journal Sources.

Update the company chart of accounts account set to add accounts (typically Liability) for:

Reserve for Spend Commitments.

Reserve for Spend Obligations.

See Steps: Create and Organize Ledger Accounts.

To record the reservation for spend commitments and obligations, configure these account posting rules:

Spend Commitment (with Reserve for Spend Commitments as the default ledger account).

Spend Obligation (with Reserve for Spend Obligations as the default ledger account).

When you create requisitions, purchase orders, and change orders, these posting rules and the Spend posting rule ensure that your commitments for requisitions and obligations post to the correct ledger account. Workday debits and credits the appropriate account according to these posting rules.

See Set Up Account Posting Rules.

Steps: Create Supplier Contracts.

Set up supplier contracts to create obligations for manual and scheduled supplier invoices.

Access the

Maintain Supplier Contract Types

task.

Add a row to create obligations for schedules invoices.

Select the

Scheduled Invoices

and

Create Obligations

check boxes.

Add another row to create obligations for manual invoices.

Select the

Manual Invoices

and

Create Obligations

check boxes.

Create Ledgers.

Define the commitment and obligation ledgers for the company.

Update ledger types to name the commitment and obligation ledger associated with an actuals ledger.

Create commitment and obligation ledgers.

Enable the creation of commitments and obligations, or just obligations, for procurement spend transactions.

Create and open ledger years and ledger periods for processing.

See Steps: Create and Open Ledger Years and Periods.

(Optional) To control your procurement spend against a budget, configure budget checking.

See Steps: Configure Budget Checking for Spend Transactions.

Set up prepaid supplier invoices to prepay supplier invoices during accounting periods that occur before the periods when you amortize expenses.

See Steps: Set Up Prepaid Supplier Spend.

Track commitments and obligations and their resulting accounting when you create:

Requisitions

Purchase orders

Change orders

Supplier invoices

Supplier invoice adjustments created from supplier invoices

Supplier contracts and amendments