Example: Set Up and Use Accounting Cash and Accounting Cash Pools

This example illustrates how to configure an accounting cash definition and accounting cash pool for cash balance checks.

You propose an amount of $7000 to fund a research project and allocate $5000 for Fund A and $2000 for Fund B. In the next fiscal year, you expect to receive a federal grant for the total amount routed through your Treasury Fund. This intermediary fund assigned to the Treasury bank account pays and receives on behalf of other funds. As a result, Funds A and B have a claim on cash with the Treasury Fund.

To help manage the cash outflow for the project, you create an accounting cash definition and accounting cash pool. When you settle payments against the funds, Workday compares the fund activities against your available fund cash ledger balances.

Use the

Create Bank Account

task to create the Community Bank
account.

Use the

Maintain Worktag Balancing Configuration

task to define the primary balancing worktag type Fund,
as well as these fund worktags:

Fund A

Fund B

Treasury Fund

Use the

Create Worktag Balancing Transaction Rule Set

task to create a worktag balancing transaction rule set.

Security: These domains in the Cash Management functional area:

Reports: Accounting Cash and Accounting Cash Pool Reporting

Set Up: Accounting Cash and Accounting Cash Pool

Security: Public Reporting Items
domain in the Tenant Non-Configurable functional area.

Security: View: Cash Balance Check
domain in the Banking and Settlement functional area.

Create a cash balancing rule to map the Treasury Fund
worktag to the Treasury bank account.

Workday uses the cash balancing rule to balance interworktag cash journal lines for the Treasury bank account.

Add the cash balancing rule to your worktag balancing transaction rule set.

See Define Cash Balancing Rules for Cash Transactions.

Define a Fund Pool
worktag hierarchy that includes Fund A
and Fund B
.

Workday uses a top-level worktag hierarchy to pool the fund balances.

See Create Fund Hierarchies.

Access the

Maintain Accounting Cash and Accounting Cash Pools

task.

In the

Default Cash Definition

and

Default Overage Option

sections, specify:

Account Set	Ledger and Ledger Summaries	Default Overage Option
Education and Government	1000: Cash 1001: Current Funds 1002: Project Funds	Overage Disallowed

In the

Override Default Cash Definition and Default Overage Option

section, specify:

Balancing Worktag	Override Overage Option	Account Set	Ledger and Ledger Summaries
Fund A	Overage Disallowed	Education and Government	1000: Cash Claim on Cash
Fund B	Overage Allowed	Education and Government	1000: Cash Claim on Cash

In the

Top Level Pool Hierarchy

and

Default Overage Option

sections, specify:

Top Level Pool Hierarchy	Default Overage Option
Fund Pool	Overage Disallowed

The accounting cash pool enables you to maintain liquidity and meet anticipated cash flow needs for the funds. The cash pool balance is $7000 ($5000 from Fund A and $2000 from Fund B).

Click

Configure advanced cash balance checking for settlement.

Add the Remove Cash Balance Check Exceptions
step to the Cash Balance Check Event
business process.

Select

Across Companies

for the evaluation option.

Select

Descending

for the payment sort order option.

See Steps: Configure Advanced Cash Balance Checking.

Create the customer invoice for the federal agency.

Workday uses the worktag balancing transaction rule to generate accrual accounting entries with the inherited Fund A
and Fund B
worktags:

Ledger Account	Debit	Credit	Worktag
Accounts Receivable	5000		Fund A
Revenue		5000	Fund A
Accounts Receivable	2000		Fund B
Revenue		2000	Fund B

When you receive the grant, record the customer payment and apply the payment to the agency invoice.

Workday generates the cash entry with the Treasury Fund
worktag mapped to the Treasury bank account in the cash balancing rule. Workday also generates claim-on-cash (interworktag) entries between the Treasury Fund
and Fund
worktags:

Ledger Account	Debit	Credit	Worktag
1000: Cash	7000		Treasury Bank Account Treasury Fund
Accounts Receivable		5000	Fund A
Accounts Receivable		2000	Fund B
Claim on Cash		5000	Treasury Fund
Claim on Cash	5000		Fund A
Claim on Cash		2000	Treasury Fund
Claim on Cash	2000		Fund B

When you purchase research supplies, record a supplier invoice amount of $5300 for Fund A and another supplier invoice amount of $3500 for Fund B.

Workday uses the worktag balancing transaction rule to generate accrual accounting entries with the inherited Fund A
and Fund B
worktags:

Supplier Invoice for Fund A

Ledger Account	Debit	Credit	Worktag
Spend	5300		Fund A
Accounts Payable		5300	Fund A

Supplier Invoice for Fund B

Ledger Account	Debit	Credit	Worktag
Spend	3500		Fund B
Accounts Payable		3500	Fund B

Settle the supplier invoices.

Workday initiates the Cash Balance Check Event
business process during settlement that compares the net activities to the ledger balances and overage option for each fund:

Fund A: The supplier payment amount of $5300 exceeds the calculated cash ledger balance of $5000. Workday removes this payment from the settlement run since the overage option is Overage Disallowed
.

Fund B: The supplier payment amount of $3500 exceeds the calculated cash ledger balance of $3000. Workday settles this payment since:

The overage option is Overage Allowed
.

The cash pool balance is the initial $7000.

Workday posts the payment journal entry to the ledger account and generates interworktag entries to balance between Treasury Fund and Fund B:

Ledger Account	Debit	Credit	Worktag	Interworktag Affiliate
Accounts Payable	3500		Fund B
1000: Cash		3500	Treasury Bank Account Treasury Fund
Claim on Cash		3500	Fund B	Treasury Fund
Claim on Cash	3500		Treasury Fund	Fund B

Steps: Configure Worktag Balancing for Journals

Steps: Set Up Accounting Cash and Accounting Cash Pools

Steps: Set Up Funds

Configure Worktags for Transactions