Setup Considerations: Deferred Billable Project Costs Accounting

You can use this topic to help make decisions when planning your configuration and use of deferred billable project costs accounting. It explains:

Why to set it up.

How it fits into the rest of Workday.

Downstream impacts and cross-product interactions.

Security requirements and business process configurations.

Questions and limitations to consider before implementation.

Refer to detailed task instructions for full configuration details.

What It Is

You can configure Workday to generate secondary journal entries to relieve work-in-progress amounts and record them as costs when you recognize revenue on a billable project.

Business Benefits

Deferred billable project costs accounting reduces manual reconciliation by automating deferred cost entries associated with these transactions:

Expense reports.

Supplier invoices.

Use Cases

You complete work on a project and incur costs, but you don't immediately bill the costs on a customer invoice. Use deferred billable project costs accounting to accrue the work-in-progress amounts and record them as costs associated with the billable project when you recognize revenue.

Questions to Consider

Questions	Considerations
Where do operational journals post for expense report billable transactions?	When you post the source transaction, Workday creates operational journals that: Debit work-in-progress amounts using the asset resulting ledger account in the Spend account posting rule. Credit the Employee Expense Payable ledger account in the Expenses Payable account posting rule.
Where do operational journals post for supplier invoice billable transactions?	When you post the source transaction, Workday creates operational journals that: Debit work-in-progress amounts using the asset resulting ledger account in the Spend account posting rule. Credit the Accounts Payable ledger account in the Payables account posting rule.

Recommendations

You can debit the cost of sales ledger account using the revenue category on the customer contract line when you create invoices or revenue recognition accounting. Configure the Revenue Category
dimension in the cost resulting ledger account for the Spend account posting rule.

Requirements

You must confirm that you want to enable deferred billable project costs accounting.

For the Spend account posting rule, configure these resulting ledger accounts:

Asset using a Deferred Project Cost
accounting treatment.

Cost using a Cost of Sales
accounting treatment.

Limitations

Once you enable deferred billable project costs accounting, you can't disable it.

Deferred billable project costs accounting doesn't support:

Ad hoc project transactions.

Billable source transaction lines with capital project worktags.

Billable source transaction lines with asset or inventory tracking spend categories.

Tenant Setup

To define tenant-wide configurations, enable deferred billable project costs accounting in the

Revenue

tab on the

Set Up Project Billing Configuration

task.

Security

Domains	Considerations
Process: Billing - Invoicing in the Customer Contracts and Project Billing functional areas. Process: Project Billing - Invoicing in the Project Billing functional area.	Create customer invoices from contracts.
Process: Billing Schedule - Core in the Customer Contracts and Project Billing functional areas.	Create consolidated billing schedules for customer contracts.
Process: Revenue Schedule - Core in the Customer Contracts and Project Billing functional areas.	Create: Revenue installments for billable transactions. Revenue recognition schedules for customer contracts.
Set Up: Accounting Rules in the Common Financial Management functional area. Set Up: Payroll - Company Specific (Accounting) in the Core Payroll functional area.	Configure the asset and cost resulting ledger accounts for the Spend account posting rule.
Set Up: Project Billing - Configurations in the Project Billing functional area.	Enable deferred billable project costs accounting.

Business Processes

Business Processes	Considerations
Customer Contract Event	Create and approve customer contracts.
Customer Invoice Event	Create and approve customer invoices.
Expense Report Event	Create and approve billable expense reports.
Revenue Recognition Installment Event	Create and approve revenue recognition accounting.
Supplier Invoice Event	Create and approve billable supplier invoices.

Reporting

You can use these report data sources to create custom reports that display information on deferred billable project costs:

Deferred Billable Project Cost Lines

Deferred Billable Project Costs

Integrations

Web Services	Considerations
Put Resource Category	Workday doesn't support these accounting treatment values: Cost of Sales Deferred Project Cost
Submit Expense Report Submit Expense Report for Applicant Submit Expense Report for Non-Worker Submit Supplier Invoice Supplier Invoice Adjustment	Workday doesn't support billable capital project worktags on expense reports and supplier invoices.
Submit Supplier Invoice Supplier Invoice Adjustment	Workday doesn't support spend categories with asset or inventory tracking on expense reports and supplier invoices.

Connections and Touchpoints

Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.

Concept: Revenue Recognition Accounting