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Administrator Guide
Last Updated: 2023-10-06
Setup Considerations: Capital Projects

Setup Considerations: Capital Projects

You can use this topic to help make decisions when planning your configuration and use of Capital Projects. 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

This feature enables you to track your spending on projects that result in capitalized assets.

Business Benefits

With capital projects, you can collect costs on a project and convert them into business assets.

Use Cases

You can track spending on large projects that you capitalize and depreciate over time. Examples can include:
  • Building improvements
  • Equipment installations
  • New buildings
  • Software and implementations

Questions to Consider

Questions
Considerations
How does your organization capitalize labor costs?
You can recognize labor costs on a project as long-term assets rather than short-term expenses. You can capitalize labor costs using these methods:
  • Fully Burdened
  • Payroll
  • Standard
What costs do you want to track against your project that you would never include in a project asset?
You can create Work in Progress (WIP) exclusion rules to resolve these transactions automatically using the spend account posting rule. This posting rule streamlines accounting and eliminates the need for review.
Does your organization use primary balancing worktags?
If so, you must define a primary balancing worktag on your capital project to use in WIP accounting.
What optional balancing worktag types does your organization use?
You can specify up to 5 additional worktag types to generate fully balanced journals. You can use these additional worktags with or without your primary balancing worktags on WIP accounting.
How do you want to assign your capital project transactions to project assets?
You can assign capital project transactions to project assets either:
  • Manually
  • Automatically
Automatic assignment reduces the effort of managing your capital project transactions.
Do you want to enable multibook accounting for capital project transactions?
To set up your tenant to create multibook accounting for capital project transactions, ensure you configure the
Business Asset Multibook Settlement
 account posting rule.
How do you want Workday to generate accounting for your labor cost summaries?
To generate intercompany accounting, select All Projects on the
Set Up Project Labor Cost Summary Configuration
 task.
To generate accounting for eligible Capital Project time, select Capital Projects Only. When transactions meet a work in progress exclusion rule, Workday doesn't generate any accounting.

Recommendations

We recommend that you:
  • Create 1 or more WIP Exclusion rules. Your exclusion rules can classify capital project transactions automatically as expenses or assets, excluding them from manual WIP accounting.
  • Create 1 or more Project Asset Assignment rules. Your assignment rules enable Workday to auto-assign capital project transactions to project assets. This auto-assignment eliminates the manual effort of reviewing your capital project transactions.
  • Use the
    Capital Project Workbench
     to:
    • Review your transactions in WIP more efficiently.
    • Automatically assign capital project transactions to project assets.
    • Capitalize project assets.

Requirements

As you configure your Capital Projects, you need to create account posting rules for:
  • WIP
  • Spend
  • Payables
  • Project Labor Cost Recovery
If you use balancing worktags, you need to configure the InterWorktag Payables and InterWorktag Receivables account posting rules.
The line level company for expense reports, supplier invoices, and manual journals must match the capital project company on that transaction line.

Limitations

You need to create manual journals to account for changes to transactions after you’ve expensed them.
To move the cost of a procurement card transaction to a capital project asset, you need to create a manual journal and tag it with the capital project.
You can only set primary and optional balancing worktags on capital projects without transactions. Once your project has transactions, you can't edit the balancing worktags selected on the project. You can only select optional balancing worktag types set for the tenant before the creation of your project.

Tenant Setup

On the
Edit Tenant Setup - Financials
 task, you can:
  • Define the level of detail for the journal lines generated from the Work in Progress posting rule. You can add these worktag types in the
    Include Worktag Types in WIP
     section for:
    • Expense report lines and itemizations.
    • Labor cost summaries from fully burdened and standard costing summarization methods.
    • Supplier invoice line and line splits and supplier invoice adjustment line and line splits.
  • Enable the posting of WIP to company asset book codes for multibook asset accounting.

Security

Assign these security domains in the Capital Projects functional area:
Domain
Considerations
Manage: Capital Projects
Manage project:
  • Assets
  • Labor Cost Summarizations
  • Transactions
Manage: Project Labor Cost Accounting
Manage and access labor cost summaries in reports and tasks.
Set Up: Capital Projects
Manage:
  • Project Asset Assignment Rules.
  • WIP Exclusion Rules.
Set Up: Project Labor Cost Summary Accounting
Configure labor cost summary accounting for capital and noncapital projects.

Business Processes

Business Processes
Considerations
Verify Capital Project Expense
Review and approve transactions reclassified as expenses.
Verify Project Labor Cost Summarization
Review and approve labor costs summarized by the fully burdened and standard costing methods.
Asset Registration Event
Register and assign accounting information to capitalized project assets.
Asset Removal Event
Undo project asset capitalization.

Reporting

Reports or Dashboards
Considerations
Capital Project Transaction Detail
Audit all capital project transactions.
Capital Project Workbench
Review transactions and capitalize project assets.
Find Project Labor Cost Summaries
View labor cost summaries created from the fully burdened and standard costing summarization methods.
View Project
Review and edit project details such as dates, organization, and owner.
Work in Progress Reconciliation Report
Compare activity related to capital projects from an operational transaction rather than a ledger standpoint and reconcile activity.

Integrations

You can use these web services to manage your Capital Projects:
  • Get Project Asset
  • Put Project Asset

Connections and Touchpoints

Capital Projects interacts with these areas of Workday:
Feature
Considerations
Business Assets
Designate your project assets to convert them into business assets and capitalize the associated costs.
Expenses
Expense reports flow to capital projects and become designated as business assets or expenses.
Financial Accounting
Manual journal entries flow to capital projects.
Payroll
Capitalize labor costs from Payroll on a project as a long-term asset.
Supplier Accounts
Supplier invoices flow to capital projects and become designated as business assets or expenses.
Time Tracking
You can capitalize labor costs from Time Tracking on a project as a long-term asset.
Projects
You can capitalize labor costs from ad hoc project time transactions.
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.