Setup Considerations: Payroll Commitment Accounting (CAN, USA)
You can use this topic to help make decisions when planning your configuration and use of payroll commitment 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
Payroll commitment accounting is a budget management process that enables you to project fiscal-year compensation and fringe benefits for filled and unfilled positions accurately.
Business Benefits
Payroll commitment accounting enables you to:
- Manage payroll expenditures.
- Prevent overspending budgets.
- Predict cash flow.
- Perform financial and resource planning.
- Administer appropriations and obligations.
- Manage reserved funding and grants.
Use Cases
You can use payroll commitment accounting when your organization needs to continually track, compare, and report on whether budgeted funds can support actual payroll expenditures. Example: A budget manager at a research university needs to reserve budgeted funds to cover payroll and fringe benefit expense for current employees, as well as potential new hires, in the upcoming fiscal year.
Questions to Consider
Questions | Considerations |
|---|---|
Do you have a business need to create commitments for multiple future years? | You can create commitments up to 5 future fiscal years for each base fiscal year. |
Do you want to check your budget while creating commitment adjustments? | You can select Enable Budget Check on the Edit Budget Check Options task to enable budget checking as part of the Create Payroll Commitment Adjustment subprocess. |
Do you have a pay period that spans 2 fiscal years? | You can configure fiscal year proration on the Edit Company Payroll Commitment Options task. It enables you to prorate payroll commitments, obligations, and related fringe that spans 2 fiscal years. |
Recommendations
- Close commitments as part of your standard year-end closing process to ensure current and future year commitments liquidate.
- Run commitment adjustments frequently to keep commitments data up to date.
- Set up and prioritize your Fringe Benefit Commitment Rules.
- Ensure you don't delete payroll periods if you have already generated commitments for those periods.
- To maximize performance:
- Consider running commitment adjustments based onBusiness Processinstead ofAll Positions.
- Create only the necessary number of future fiscal years.
- Ensure you selectEnable Salary Over the CapandEnable Journal Detailson theCommitmentstab of theMaintain Payroll Accounting Optionstask only if required.
Requirements
To enable the salary over the cap feature for payroll commitments, you must also enable the feature for payroll accounting.
Limitations
- Payroll commitment accounting currently only supports USD and CAD currency.
- Payroll commitment accounting supports only 2 open base fiscal years per company.
Tenant Setup
You can select tenant-wide configurations on the
Maintain Payroll Accounting Options
task to determine whether to:
- Enable salary over the cap for payroll commitments transactions including initial commitments, commitment adjustments, and liquidations.
- Enable initial commitments and adjustments processes to respect the override frequency on an earning.
- Display detailed commitment data in your finance journals.
- Include payroll forward accruals for budgetary control.
- Include fringe basis on fringe benefit expense to identify earning pay components on journal lines that relate to fringe benefit expense.
Security
Domains | Considerations |
|---|---|
Set Up: Position Commitment Accounting in the Core Payroll functional area. | Enables users to configure:
|
Set Up: Tenant Setup - Payroll in the System functional area. | Enables access on the Maintain Payroll Accounting Options task so that you can select the Use Earning Frequency Overrides check box. |
Business Processes
Business Process | Considerations |
|---|---|
Create Initial Payroll Commitments
| You can calculate initial payroll commitments once for each company at the beginning of the fiscal year. |
Create Payroll Commitment Adjustments
| You can use the Check Budget (Staffing) business process to automate commitment adjustments when you add it as a step in position-related business processes, such as:
|
Reporting
Report | Considerations |
|---|---|
Payroll Commitment Summary
| Displays initial payroll commitments, subsequent liquidations, and adjustments. |
Payroll Commitments by Company and Fiscal Period
| Displays the summary of payroll commitments for a specific company and fiscal year. |
View Fringe Benefit Commitment Rule
| Displays your configured rules for the fringe benefit percentage brackets of payroll commitments. |
Integrations
No impact.
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.
Features | Considerations |
|---|---|
HCM | Workday updates the payroll commitments data to reflect HCM activities, such as:
|
Financial Accounting | Payroll commitment requires you to set up ledgers and fiscal schedules. Financial accounting generates commitment, obligation, and liquidation journals. |
Budgets | Create initial commitments and adjustments. |
Payroll Accounting | Depending on your use case, these features have significant impact on how the system processes payroll commitments when you enable them:
|