Workday Financials Considerations Regarding the Functional Impacts of COVID-19
COVID-19 is creating a dramatic impact on the global economy, and likely will continue to do so for a significant part of the year. We know that these are uncertain times for businesses and their employees, and CrossCountry has been closely monitoring the developments. Our team members are a geographically diverse and nearly 100% remote/ work from home practice that minimizes the impact on our operations.
We want to ensure that we support you as you work through any challenges. If you need updates to your Workday system, our teams are fully staffed and available to help.
Some functional areas that may be impacted are highlighted below:
1. Financial Accounting
Companies will need to consider how COVID-19 is impacting their financial accounting process and adjust account positing rules and accruals.
- General Ledger: Account Posting Rule adjustments may be necessary for any new earning/ deduction codes created by new employee programs (new allowances for work from home) or for other related COVID-19 spend.
- Prepaid Accruals: Changes in overhead spend may cause a need for adjustments to prepaid accruals.
- Accruals: It may be necessary to change accruals to account for changes in policy (e.g. PTO carryover update).
- Currency: Adjustments to account for possible extreme currency fluctuations.
2. Financial Reporting
Organizations will need to be able to report on COVID-19-related costs and impacts on the accounts receivable and accounts payable processes.
- COVID-19 Costs: Adjustments may need to be made to existing reports, or new reports may need to be created in order to track COVID-19-related spend across all modules.
- Accounts Receivable Reports: Workday reporting can be utilized to track impacts on accounts receivable processes. The ability to track invoice aging impacts, bad debt-related to COVID-19, and loan covenants created due to extenuating circumstances can help businesses better manage revenue impacts.
- Invoice Aging Reporting: Enhancing reporting on supplier invoice aging can provide a more granular projected liquidity and allow for better forecasting.
- Spend Management: Visibility into spend-by-category or vendors will help determine areas for negotiation, reduction, and elimination of costs to improve management of cash.
The COVID-19 pandemic has had a profound impact on the budgeting process. Companies will need to adjust existing budgets and potentially modify the year-over-year budgeting process for 2021.
- Impacted Budgets: Previously created budgets have been greatly impacted by COVID-19-related expenditures and revenue fluctuations. The existing budgets can be modified, or a separate plan structure can be created to track the adjusted budget while retaining the original for reference.
- Year-Over-Year Budgeting: Given fluctuations caused by the COVID-19 pandemic, actuals from 2020 may not be able to be used for the purpose of year-over-year budgeting. Reporting adjustments can help bridge this gap.
Companies can utilize projects to track costs, aggregate activities, and modify approvals that are COVID-19-related.
- Aggregating and Tracking: Projects can be utilized to track COVID-19-related spend on initiatives, infrastructure, or other items.
- Specialized Approvals: In addition to allowing the tracking of COVID-19 costs, projects can be used to dictate special approvals for spend.
With COVID-19 impacting spend, companies may need to make adjustments in order to track COVID-19-related spend, modify expense policies, or further enable employee self-service.
- Tracking: Additional designations (spend category, worktag value, etc.) created/ modified in order to track COVID-19-related spend.
- Expense Items: New expense items can be created to allow for work from home expenses and give the ability to dictate reimbursement and amount of spend.
- Cash Advances and Spend Authorizations: Configuration changes may need to be made to cash advances and spend authorizations in response to evolving needs.
- Employee Self-Service: With many employees working from home, employee self-service may need to be expanded.
COVID-19 has caused extreme fluctuations in the demand for specific goods. Companies may need to consider approval process changes, visibility enhancements, auto-replenish process adjustments, and procurement mobility.
- Approval Process: Approval process adjustments may be needed to fast-track procurement of items that are experiencing a spike in demand.
- Visibility: Processes and reporting can be enhanced to give broader visibility into items on backorder.
- Auto-Replenish Process: Enhanced auto-replenish processes and approvals can be for critical non-PAR supplies to account for fluctuations in demand.
- Mobile Devices: Introduction of additional mobile devices and labeling to speed up receipt, put away, pick, pack, and ship processes.
Companies will need to track the impact that COVID-19 has on revenue and make adjustments for customers who are unable to pay invoices on time.
- Tracking: Indicators may need to be created to track loss of new sales, existing customers, or revenue due to COVID-19.
- Payment Terms: Payment terms may need to be adjusted for customers that have been impacted by COVID-19.
- Bad Debt: The process for bad debt write-offs may need to be adjusted.
8. Adaptive Insights
With COVID-19 rapidly impacting every aspect of business, companies can leverage Adaptive Insights to rapidly create dynamic data models with real-time Workday data.
- What-If Headcount Analysis: Adaptive Insights can be leveraged to rapidly model “what-if” headcount scenarios for companies that are trying to plan possible responses to the impacts of COVID-19.
- Revenue Modeling: Companies can use Adaptive Insights to rapidly create revenue models that account for different end dates of the COVID-19 lockdown.
- Spend Reduction Analysis: Adaptive Insight models can be created to dynamically show the immediate, and long-term impacts of spend reduction levers that companies may potentially utilize.
During the COVID-19 pandemic, business needs are changing quickly. CrossCountry is available to support your business to ensure that Workday is an effective and beneficial tool in navigating this new environment.