Close
Overview
Workday provides several tools to help you complete your close procedures at the end of an accounting period, quarter, or year. These tools allow you to change ledger period and year statuses, roll forward year-end balances, and create and execute a close checklist. You can use these tools, along with other tasks performed outside of Workday, to manage your close processes.
Objectives
By the end of this chapter, you will be familiar with the following:
- Update the period close checklist.
- Start a period close event.
- Roll forward a year-end balance.
- Maintain year-end closing rules.
- Close the ledger year.
- Run financial reports.
Security Policies
As you deploy Workday, you will configure security policies to ensure the appropriate security groups have the right permissions. This chapter covers the following security groups, domains, and business processes.
Security Groups
- Finance Administrator: This user-based security group has unconstrained access to create and maintain all financial setup data. Examples include financial institutions, financial accounting data, ledgers, journal sources, account control rules, fiscal schedules, items, and taxes. No approval authority.
- Accounting Manager: This role-based security group can open/close ledger periods and years for assigned companies. Correction authority for financial accounting business processes.
Domains
Topic | Functional Area | Domain |
|---|---|---|
Period Close | Common Financial Management | Process: Close Year End Process: Period End Process: Reopen Year End Process: Year End |
Business Processes
- Period Close Event
- Period Close Notification Event
Period Close Event
You can create optional close checklists to manage period, quarter, and year-end closes directly in Workday through a business process workflow. These checklists can help you gain insight into these close processes for future improvement. Managing these processes effectively is key to a timely and complete close.
With your close checklist built into a business process definition, you can define your tasks in a logical order and indicate who is responsible. At the appropriate moment during the close, Workday sends the responsible worker a notification that they need to complete a task. When they complete the task, Workday notifies the next worker responsible for completing the following step.
By using this tool, you can also monitor close progress. You can analyze key close metrics, such as the length of time it typically takes to close, and the time taken for each step. You can also send notifications about the close to any worker at any time.
A typical checklist might include the following:
- Tasks within Workday that require completion (e.g., run reconciliation reports for accounts payable; approve pending transactions, such as expense reports; update ledger period statuses; review year-end closing rules; and run the year-end close process).
- Tasks outside of Workday that need require completion (e.g., collect on customer accounts).
- Workers responsible for the completion of each step.
- Review steps.
- Approval steps.
- A notification regarding the close.
Period Close Notification
When you submit a period close notification, Workday launches the
Review Period Close Event
business process. This event creates a My Tasks notification for the worker to review. If the worker has appropriate security access, the notification also includes detailed period close information, period close business process steps information, and process history. Workday allows you to add instructions to the worker about what you need them to accomplish for the period close.The worker can review the notification, take any required action to complete the close step, and add comments. After the worker marks the notification as complete, Workday clears the worker's name from the Period Close Notification page. The Notification History tab shows the worker's comments.
Note
: Each close event can have only one active notification event. If a notification is in progress when you submit another one, Workday cancels the existing notification and launches a new notification event.Period Close
You can use the
Ledger Period Journal Status
report, Update Ledger Period Status
task, or Mass Update Ledger Period Status
task to review ledger periods.Before you close ledger periods, verify that:
- You have posted everything that requires posting.
- Everything that is in progress is in the correct status.
- Everything you need to finalize is in its final state.
- If you have work in progress that you need to finalize, drill down to determine what action to take.
Financial Reporting
Workday produces financial reports from the day-to-day accounting transactions of an entity. For example, the
Trial Balance
, Ledger Detail
and Reconciliations
reports provide analysis and control to review account postings and balances.You can produce consolidated profit and loss, balance sheets, and cash flow statements to meet statutory financial statement needs in either a company base or reporting currencies. You can also produce financial statement reports by running a standard report or creating a custom report to display specific groupings or calculations.
Example
:A company accountant can run the income statement standard report or create a custom report with configurable rows and columns that:
- Lists the amounts for Current Period Year-to-date.
- Lists the Last Year Current Period Year-to-date.
- Calculates net income or loss.
- Shows certain expenses in detail.
- Shows revenue in summary.
Roll Forward Year End Balance
Roll forward year-end balances on accounts to the beginning balances for the next ledger year. Doing so enables you to report on the new year using beginning balances rolled over from the last year. Any reporting for the new year uses the beginning balance for the year plus activity for the year. You might do this process if you have lots of activities in the beginning of the year, before the year close, that you want to report on. You can roll balances forward as little or as much as necessary before you close the current year.
The process creates or replaces the beginning balances for the next fiscal year. The process gives you the most current numbers in your next fiscal year as you make adjustments and work toward close.
Maintain Year-End Closing Rules
Workday, by default, rolls account balances forward to the same account during processing. If you have year-end closing rules, Workday applies these rules so that you can move prior year balances to a separate account. Doing so allows you to start with a blank account for the new year. You might have such rules, for example, for retained earnings.
Close Ledger Year
After you close a ledger year, it is no longer available for processing, but remains available for reporting.
To make changes to one of its ledger periods, you must reopen a ledger year using the
Reopen Ledger Year
task. You can then reopen the ledger period.Use the
Ledger Year Beginning Balances
report for the closed year. This report enables you to view all ledger accounts that have beginning balances for a company's ledger year. Details include the debits, credits, and net amounts for each account, as well as ledger year totals across all accounts. You can drill into net amounts to review the journal activity that comprised the balance. You can also drill into ledger accounts to review usage details.