Overview of Procure to Pay

Workday Education

Overview

Workday Procurement supports the acquisition of goods, services, and contingent labor all from a single, comprehensive spend management system. Multidimensional reporting and analytics allow you to gain real-time visibility into spending trends across your organization. It also tracks and manages goods and creates the necessary accounting related to each event.

Organizations Overview

Workday defines and delivers the most common types of organizations. Within each type, you can define organizations to reflect your company's requirements. You can create unlimited numbers of each type of organization and then use them for different types of reporting. You can combine specific types of organizations in a hierarchy to represent a structure.

Workday organizations are:

Basic building blocks to the Workday application.

Included in hierarchies to represent how you roll up organizations providing multiple views of your data.

Triggered to run business processes, aggregate data for reports, and assign roles. Within each type of organization, you can define organizations to reflect your company's requirements.

Note
: You can use every organization as a worktag. You cannot use a worktag as an organization. Worktags have no dependents or parents.

Objectives

By the end of this chapter, you will be able to:

Describe organizations.

Explain different types of organizations.

Describe worktags and their usage.

Maintain spend categories.

Costing Organizations

Workday organizations are available for different areas, such as costing, hierarchy, pay, and custom. Place each different type into a hierarchy of the same type for reporting purposes. For this course, we will focus on the Costing Organization.

Type	Definition
Company	Companies are organizations within Workday and represent the internal business entities to which transactions post. Payroll and Workday Financial Management use Company to control accounting and reporting functionality. Company is the level at which you hold a balanced set of books. In most cases, represent legal entities as companies, but companies do not have to be legal entities. You can define a company at a lower level than a legal entity. Use a legal entity when the customer needs to segregate security at a lower level for decentralized processing or other needs. The company is the level according to the financial accounting details.
Cost Center	Cost centers hold financial transactions, budgets, as well as workers. Often, cost centers are departments within a legacy system. As a general guideline to defining cost centers, they should have a manager, financial impact, and a budget. There may be cost centers that do not meet the above criteria provided as a guideline. It is important to note that more granular definitions of Cost Centers may overlap with other worktags and require more effort to administer. Example: if you need to report salary expenses for one or two employees, you can extract reports from payroll accounting avoiding a dedicated cost center. It is also important to note that cost centers are how you report and manage cost, but NOT how you report and manage your people. Workday has the Supervisory Organization for that purpose.
Location	Location represents the physical location of the worker (or business asset), whereas region represents a geographic area for cost or revenue capture. Example: There are two sales people in the Miami office. One has responsibility for the US-South region and the other South America region. In Workday Financial Management, it can be useful to think of the location as the origin of the cost and the region as the destination. Defining the level of granularity of locations is important, as product lines use locations (e.g., Workday Human Capital Management, Workday Payroll, and Workday Financial Management). For system deployments, you should reach a consensus between all functional areas as to the level of location granularity. Workday recommends owned locations (e.g., defined, built, and moved) by a single resource obtaining requirements from all product areas. Workday Financial Management : Locations reflect an asset's physical location. Also to indicate shipping and receiving for a requisition or purchase order. Workday Human Capital Management : Locations are an attribute associated with a worker in a position and locations reflect a worker's work location rather than an area of responsibility. Inventory : You can set up locations for inventory and use them to create inventory sites and stocking locations. A stocking location is where you physically store, track, and transact inventory. An inventory site is a group of stocking locations you manage as a unit. At the inventory site, you establish policies that apply to all stocking locations in the site, such as fulfillment and replenishment policies.

Workday uses cost centers to track financial transactions, as worktags to add a reporting dimension. If you budget or hold people accountable to budgets at a certain level today that is likely your cost center. With your Workday Financial Management design session, you should have a clear sense of how you have defined your cost centers. Ensure that your cost center is based on one dimension for comparative purposes. You can roll up cost centers into cost center hierarchies.

Location and Location Hierarchies

Workday provides Location and Location Hierarchy objects that represent multiple levels in the hierarchical structure of a location.

Setting up locations and location usages extends your ability to manage and report on business facilities, equipment, and the people who use them. Location usages determine which location attributes are available for you to configure.

When you create a location, you can select these location usages:

Usage	Functional Areas	Examples
Business Asset	Financial	The physical location where you store an asset or where it is in use.
Business Site	Workday Financial Capital Management, Workday Human Capital Management	The physical location of a business. For business site locations, you can: Assign workers. Configure time zones. Define work hours. Manage organizations and positions. Provide contact information. Track and assign resources. Workday determines the currency and language based on the business site location usage. Business sites must include: Address Time Profile You cannot simultaneously use business sites such as: Job posting locations. Offsite recruiting locations. Training rooms. Work spaces.
Inventory	Financial, Procurement, Supply Chain Management	A location where you stock inventory or a group of stocking locations that you manage as a unit. Example: You set up a warehouse as an inventory location and designate a large aisle as a stocking location to store goods. You cannot set up a location as an inventory location and a par location simultaneously.
Par	Financial, Procurement, Supply Chain Management	A location where you can manage periodic inventory. Example: Cabinets or storage carts. Must include an address. You cannot set up a location as a par location and an inventory location simultaneously.
Ship-To	Financial, Procurement, Supply Chain Management	Shipping locations used to associate ship-to addresses with deliver-to locations. Must include an address.
Workspace	Human Capital Management	Spaces within a business site or another workspace. Example: Building, floor, cubicle, or desk. Work space locations cannot be a top-level location. Workspaces must be subordinate of a workspace or business site. In Procurement, a worker's Deliver-To location defaults from their workspace.

A shipping location is commonly referred to as the Ship-To location. Suppliers ship the goods to the ship-to location, where the organization receives goods. The shipping location is typically a central receiving dock but could be any physical location. A ship-to is defined by selecting Shipping as the Use For option when defining an address. Use the

Edit Company Contact Information

task to edit a company ship-to address.

Users commonly add deliver-to locations as a Workspace in Workday. They appear on the lines of requisitions and purchase orders, and most importantly on a goods delivery ticket. The Deliver-To location defaults from the worker's location onto business documents.

Whereas a ship-to is a physical address, such as the warehouse, a deliver-to is an internal location to route goods to the requester.

Note
: Workday enables you to define a Ship-To location with an associated Deliver-To location. Defining a Ship-To location with an associated Deliver-To location ensures the defaulting process of Ship-To and Deliver-To. Consider these new associations when defaulting on the requisition.

Worktags

Workday provides an innovative way to capture and report financial information called Worktags. Traditional accounting systems are limited to capturing expenses, revenue, and so on using code block elements. Worktags provide the ability to capture information that is not contained within the traditional code block such as customer and product.

A Worktag is a keyword or label representing a business dimension of an enterprise. It is used to associate Workday business events and objects with enterprise business dimensions to organize, search, aggregate, and report on system data by business dimension. Worktags enable you to mark events (i.e., transactions) and business objects to make their business purposes clear and establish their common relationships through classification. Worktags give you a multidimensional view of your business that you can act upon. You can find information easier, filter searches to focused results, and analyze information in aggregated and summarized reporting by business dimension. Worktags can be assigned to any line item that generates a financial update (i.e., journal entry lines, supplier invoice lines).

For example, many photo tagging systems use something similar. If you take a picture in California, you can tag the photo with keywords such as 'California' and 'CA' to find the picture later. Worktags are similar to these tagging systems.

Most worktags are created automatically. That is, when you create the corresponding Workday object, Workday automatically creates a worktag for it. Example: When you create a supplier, the supplier name becomes a worktag available for use in transactions. Workday delivers the following worktag types that you can use to tag your business transactions and supporting data:

Delivered Organizations
: Delivered by Workday to track financial transactions and group people.

Delivered Worktags
: Numerous predefined types and values with preset transaction availability.

Custom Worktags
: 15 delivered worktags with configurable names and values. Each custom worktag associates the worktag usage with Financial, HR, Payroll, or Time Tracking transactions or data.

Custom Organization Worktags
: Custom organizations are user-defined labels for specific areas of your business that you would like to group and create reporting. A custom organization is a worktag by definition and can be used on financial transactions. You can associate workers with custom organizations, default them into transactions based on membership, and use them to route transactions to specific people based on role. You can create an unlimited number of custom organizations but only 10 can be identified to Use as Financial Worktag.

Basic Worktags
: Define basic worktags if the full feature is out of scope. Example: Define basic suppliers for tracking contingent workers if supplier accounts will not be deployed. Currently the only basic worktags that are available are: Customers, Grants, Gifts, Projects, Supplier, and Sales Item.

Workday delivers more than 73 worktags that you can use to tag your business transactions and supporting data. For each of these delivered worktag types, Workday presets where you can use it so that you do not have to sort through inapplicable ones when selecting. However, you can modify the usage.

Note
: You can use every organization as a worktag, but you cannot use a worktag as an organization.

For a complete list of delivered worktags, check Workday Community. Below are some of the delivered worktags:

Ad Hoc Payee

Alternate Supplier Contract

Company

Cost Center

Intercompany Affiliate

Interworktag Affiliate

Location

Procurement Item

Project

Region

Spend Category

Supplier

Supplier Contract

Tax Applicability

Tax Authority

Tax Category

Tax Code

Tax Rate

Most worktag types are automatic. That is, when you create the corresponding Workday object, Workday automatically creates a worktag for it.

These worktag types have some noteworthy differences:

Cost centers and regions appear in all transactions where you can select a worktag.

Custom organization worktags generate automatically if the custom organization type has Financial Usage selected in the

Maintain Organization Types

task. Workday allots up to 10 custom organizations as financial worktags.

Workday allots each tenant up to 15 custom worktags. Define and enable custom worktags manually. The steps in the next section describe how to create custom worktags.

Basic worktags provide a quick and easy way to create basic definitions for customers, projects, sales items, and suppliers. When you want to use them in Workday Payroll, Workday Financial Management, and Workday Spend, but do not need the complexity of their full-featured definitions. For example, you want to tag a contingent worker contract with a supplier name without having to fully define the supplier.

You do not need to create detailed definitions or enable numerous financial-specific domains. You can convert from basic to full-featured versions anytime.

Currently you can create basic worktags for Customers, Gifts, Grants, Projects, Sales Items, and Suppliers.

You can select basic worktags for:

All financial transactions including requisitions, spend authorizations, and expense reports.

Project timesheets (except a basic project).

Contingent worker contracts (basic supplier only).

Payroll input by worker (basic project only).

You can convert basic versions of customers, suppliers, sales items, projects, grants, and gifts that you use as basic worktags to their full-featured definitions. For example, if you are using contingent workers in Workday Human Capital Management and then decide to deploy Workday Financial Management, reports return both basic and full-feature worktags.

Most worktags are set up automatically based on transactional context. For example, when you create a supplier, the supplier name becomes a worktag. There are several ways that worktags associate with a transaction or supporting data, including:

Built-in Worktags
: Worktags that are essential to the transaction or supporting data that they are separate fields. For example, the supplier name or spend category on a supplier invoice are built-in worktags.

Defaulted Worktags
: Worktags that Workday automatically assigns to specific transactions based on the worker creating the transaction. For example, an expense report for a worker automatically includes that worker's organization worktags. You can remove them as necessary.

User-entered Worktags
: Worktags that you select from a list of worktag types relevant to the transaction or supporting data.

Related Worktags
: When you set up certain objects, such as custom organizations, customers, and cost centers, you can associate worktags with them. When used in transactions, any worktags associated with the object will automatically carry forward onto the transaction. For example, if you create a customer invoice and that customer has a cost center that cost center automatically becomes a worktag for the invoice. Related worktags are currently available on the following objects: cost centers, customers, custom organizations, gifts, grants, programs, projects, purchase items, regions, revenue categories, sales items, spend categories, and sponsors.

You can configure some worktags to populate on a transaction automatically using related or defaulted worktags. Related and defaulted worktags are similar, but there is a big difference.

Related worktags manually relate to another worktag. For example, on the cost center organization worktag, you can relate a specific region worktag. When you select the cost center as a worktag on a transaction, Workday automatically populates the Worktags field with the cost center and the related region worktags.

Defaulted worktags are similar to related but are only applicable to organization assignments for a worker. For example, on Aidan Mitzner's organization assignments, you can notice the worker assignment to GMS (USA) company, 50000 Office of CFO cost center, and so on. When Aidan creates an expense report, purchase requisition, timesheet, and more, the organization assignment worktags will default onto these transactions.

Inactivating a worktag value does not change any historical data or affect previous transactions, only transactions dated on or after the date you inactivate it.

For worktags you use in Workday Financial Management reports and business documents, worktag values that are inactive do not display in worktag prompts. You still have the flexibility to search for inactive worktags and use them as needed.

To restrict workers from using inactive worktag values, you can create custom validations and business process condition rules to check for transactions with inactive worktag values.

Financial accounting and reporting drive what appears on a transaction. For example, when you run period close reports by cost center, you need a cost center on every transaction that might affect period close. Spend rules determine a project number. You need to make sure to include a project number on each supplier invoice and supplier invoice adjustment.

While you cannot technically mark a new field as required, only Workday can do that. You can choose to make a worktag a requirement. Through the use of worktag usage and custom validations, you can set rules that require specific worktags on a transaction. When a specific worktag or piece of data is missing, Workday displays an error to the user prompting them to complete the required data.

Worktag usage and custom validations help users catch transaction issues up front. Ensuring required data for business process routings, account posting rules, and financial reports is on the transaction.

For each type of financial transaction that uses worktags, you can choose the worktag types that you want to be available in the transaction. If there are related worktags, Workday automatically populates the transaction with only the worktags values for the allowed worktag types.

Workday delivers the allowed worktag types that are available for each transaction type. Use the

Maintain Worktag Usages

task to view the allowed worktags and modify them as needed.

In addition, you can specify whether a worktag is a primary or additional worktag, and if a requirement exists.

Primary Worktags

Adding the worktag as a primary worktag presents the worktag as an individual field or column. You can choose the order these worktags displays and on which transaction the worktag is enabled. You can specify up to 10 primary worktags on any transaction.

Additional Worktags

You can set up additional worktags as other worktags that you may want on a transaction. The other worktags display in a multiselect field. Marking an additional worktag as required will place an asterisk (*) on the Additional Worktag field/column. When searching within the prompt, we will mark the Worktag type with an asterisk (*).

Error Messages

The user will receive an error message if any required Worktags are missing. The fields that are missing values get highlighted. If you configure a required Worktag, you will not be able to save the transaction with a missing value - not even save for later.

Tenant Wide

Any worktag setup will display for that transaction type throughout the tenant. If you have multiple companies in a tenant, all companies get prompted for the same required worktag setup through the

Maintain Worktag Usage

task. If you need to require a specific worktag only on one company and not throughout the tenant, you can use custom validations.

You can define worktag usage for use at the transaction level as described in the previous section. Related worktags are related to other business objects in the tenant. For example, on a Cost Center object, you can relate a specific Region worktag value. When using a cost center on a transaction, Workday automatically populates the related Region worktag. You can configure this using the

Maintain Related Worktag Usage

task. Below is a list of several objects, which you can configure with a related worktag:

Cost Center

Customer

Project

Region

Revenue Category

Spend Category

Custom Validations

Custom validations allow you to define validation logic to control data quality on your financial transactions. For example, a custom validation might ensure that a supplier invoice transaction includes both a cost center and region worktag but only if you select company ABC.

You can create custom validations to:

Warn users when entering invalid transactions.

Prevent users from submitting invalid transactions.

Alert transaction approvers to conditions that need more careful review.

A custom validation consists of the transaction type, validation type, error message, and condition rules. The custom validation messages display on the transaction after the user selects the Submit button. Custom validations will generate errors or warnings when you submit the transaction.

Each type of transaction has its own set of custom validations, and the list of transactions, which allow for custom validations, is Workday delivered. You can create custom validations for numerous transaction types, some of which include:

Advanced Shipment Notice

Change Order

Purchase Item

Purchase Order

Purchase Order Acknowledgement

OCR Supplier Invoice

Receipt

Receipt Adjustment

Requisition

Return to Supplier

Supplier

Supplier Change

Supplier Contract

Supplier Contract Amendment

Supplier Invoice

Supplier Invoice Adjustment

Supplier Invoice Request

Supplier Refund

Tip
: For a complete list, access the

Maintain Custom Validations

report.

You can configure custom validations with either a critical or warning severity type. Execution occurs on both types upon transaction submission, not during data entry.

A critical custom validation is a fatal error and error resolution must occur before the user can continue.

A warning is a message to the worker, but you can bypass it.

Using the existing

Maintain Custom Validations

task, you can create or edit critical errors and warning messages for transactions based on rule conditions that you establish. When your users perform these transactions, Workday validates them against the current custom conditions. Approvers can also notice any warnings in the transaction they receive for review.

A condition is part of the custom validation and consists of one or more rules. You can create condition rules describing the criteria required to generate an error or warning during transaction validation. This means that you are writing the condition rule to explore a time when something is wrong with the transaction. Build custom validations in the form of error conditions.

Tip
: You can update the custom validation and its condition rules. Access the validation's Related Actions menu to select Validation > Edit Condition Rule.

If you have written a custom validation you can use on another transaction type, you do not need to write another one. You can choose to use the same custom validation on other transaction types, which enables you to reuse and only maintain one custom validation.

Workday displays the default message that you set up in the custom validation. If you want a more descriptive message, you can create a custom message called a validation message following these steps:

Access the Maintain Custom Validations report.

Select the type of transaction.

From the validation's Related Actions, select Validation > Configure Validation Message.

Spend Categories

Use spend categories to logically group similar account-related objects together for posting, searching, and reporting purposes. All requisitions, purchase orders, supplier contracts, invoices, and all items you track must have a spend category. Also, configure spend hierarchies to simplify procurement and expense searches, and for reporting and analytics. A single spend category can exist in multiple hierarchies to prevent the creation and maintenance of duplicates.

Create spend categories to classify assets, expense items, purchase items, supplier catalog items, or inventory items. Spend categories drive the accounting, connecting the asset, item, or service to the appropriate ledger account. You can define categories to fit your enterprise's needs and follow the standard UNSPSC or NIGP code classification hierarchy. You can also use a combination by defining your own spend categories and mapping them to standard commodity and services codes. The requisition fulfillment source defines how the system should try to source a requisition item either from inventory or a purchase order.

Spend category usage types define use for a spend category. For example:

Ad hoc Payment: Used for one-off purchases.

Expense: Use on expense items.

Inventory: Used to enable associated stockable items.

Procurement: Used on purchase items, purchase orders, requisitions, receipts, returns, and supplier contracts.

Workday automatically includes the Supplier Invoice spend category usage after you save the spend category with Procurement usage.

Supplier Invoice

Important
: You cannot use a spend category for both business asset tracking and inventory tracking, as these attributes drive module-specific accounting functionality and system edits.

Customers can link the same spend category to multiple hierarchies. A spend category can belong to more than one spend category hierarchy if the top level of the hierarchy is not the same.

The feature helps prevent duplicate spend categories and provides greater reporting and analytical insight.

Once activated in a tenant, review the following additional enabled validations:

1099 Misc Configuration will not allow duplication of spend categories for reporting.

1042 Income Codes will not allow the duplication of spend categories across codes.

When adding spend categories to multiple hierarchies, existing or planned reports using spend categories may produce duplicate results.

Review existing or planned reports using spend categories and spend category hierarchies, and update to use the new CRFs as appropriate.

Review existing or planned custom validations using spend category hierarchies to confirm they work correctly and as intended.

Business Processes

A business process is a set of configurable steps used to complete a larger overall task. As with domains, you control access to a business process through its business process security policy. The policy defines the security groups that have access to the actions of a specific business process, including:

Initiating the business process

Approval

Review

Deny

Web services

Overall actions on the business process (i.e., view, rescind, cancel, and correct)

Policy restrictions, such as delegation, comments, and attachments