Designing Spend in Workday is about more than “getting POs to go out” or “getting invoices paid.” It is about building a Procure-to-Pay (P2P) backbone that controls indirect spend, keeps Accounts Payable (AP) clean and gives finance a clear view of where money is going. The core building blocks are Suppliers, Purchase Orders (POs), Supplier Invoices, and Spend Categories, all tied together with Worktags and Business Processes.
When these are designed well, buyers, requesters and AP can work quickly without breaking policy, and your reports actually show spend by category, supplier and cost center without Excel gymnastics.
Start with the P2P story, not the screens
Before touching configuration, map your P2P story end-to-end:
- Who requests goods and services? (Employees, managers, project teams.)
- Who approves spend at different thresholds? (Managers, budget owners, finance.)
- When do you require POs vs allow non-PO invoices or card spend?
- Which suppliers and categories are critical for control and reporting?
Workday Procurement is built to run that entire flow—from Requisition → PO → Receipt → Invoice → Payment—in one system. Your configuration should reflect standard paths, not rare exceptions, and push most spend through a controlled P2P flow.
Suppliers: keep the vendor master clean
In Workday, the Supplier record is your vendor master. It drives payment terms, tax treatment, banking details, and is a major fraud and compliance risk if unmanaged.
Good supplier design practices:
- Use Supplier Registration or structured onboarding (via Supplier Portal or internal forms) so data enters in a consistent way.
- Partition suppliers by Company or region when needed, but avoid duplicate Supplier records for the same legal vendor unless there is a genuine legal/operational reason.
- Maintain key attributes: payment terms, tax IDs, diversity classifications, default Spend Categories and Worktags where appropriate.
Governance tips:
- Restrict who can create or change Supplier banking details.
- Run periodic Supplier Data Audits for inactive, duplicate or incomplete records.
- Use preferred supplier flags and supplier contracts to steer requisitions to the right vendors.
A clean Supplier master means fewer AP errors, fewer one-off vendors and better leverage in negotiations.
Spend Categories: your lens on indirect spend
Spend Categories are how Workday classifies types of expenses (for example, Office Supplies, Travel – Airfare, Software Subscriptions). They sit alongside ledger accounts and Worktags to drive both accounting and reporting.
Key points:
- Spend Categories are used on Requisitions, POs, Supplier Invoices, Expense Reports and sometimes journals.
- They often follow a naming convention (for example, SC10044 – Construction – Utilities, SC10486 – Office Supplies).
- They can be limited by usage (for example, allowed on Procurement vs Invoice vs Expense).
Design principles:
- Keep the Spend Category list lean but complete—too many categories confuse requesters and approvers.
- Align Spend Categories to how finance wants to analyze spend (e.g., Travel vs Marketing vs IT) and to how contracts and budgets are structured.
- Use Spend Category hierarchies to roll up related categories into reporting groups (for example, “Travel” grouping airfare, hotels, ground transport).
Limit choices:
- Configure which Spend Categories can be used in Procurement or AP to reduce misclassification.
- Use document rules or supplier defaults to auto-populate Spend Categories where possible.
A strong Spend Category design is what turns raw AP transactions into usable spend analytics.
Purchase Orders: control before the invoice arrives
Purchase Requisitions and Purchase Orders (POs) are your primary tools for controlling spend before it happens. Workday lets employees create requisitions, route them for approvals and generate POs that suppliers fulfill.
PO design guidelines:
- Define when POs are required vs when non-PO invoices or other methods are allowed (for example, POs for most indirect spend above a threshold, non-PO for utilities or certain recurring fees).
- Use Requisition Templates for common buys (laptops, common services) to pre-fill Supplier, Spend Category and Worktags.
- Configure Business Processes for requisition and PO approval with:
- Threshold-based approvals (manager, budget owner, finance).
- Parallel approvals where helpful to reduce cycle time.
For POs to help AP:
- Ensure PO lines carry correct Spend Categories and Worktags (Cost Center, Project, etc.); these flow down to receipts and invoices.
- Use 3‑way matching (PO, Receipt, Invoice) where goods receipt is important, and 2‑way matching where services or other factors make receipts impractical.
A clean PO design means most invoices can match and auto‑route without manual intervention.
Supplier Invoices: keep AP simple and accurate
In Workday, Supplier Invoices can be created from POs, from contracts, or as non‑PO invoices. AP’s life is much easier when most invoices are PO‑based.
PO invoices:
- When an invoice is matched to a PO, Workday pulls in lines, quantities and pricing from the PO (and receipts if used).
- Spend Categories and Worktags typically follow the PO, preserving coding decisions.
- Matching rules (for example, tolerance thresholds) can auto‑approve small variances and route larger variances for review.
Non‑PO invoices:
- Use them sparingly and with clear business rules (for example, utilities, government fees, some one-off professional services).
- Provide guidance and controls on Spend Category and Worktag selection, or leverage supplier-related worktags and document rules to auto-populate coding.
AP best practices:
- Use Worktag validation rules to prevent invalid combinations (for example, Cost Center + Spend Category) that cause posting errors.
- Configure invoice Business Process approvals based on Worktags and Spend Categories (for example, Project Manager approval if a Project Worktag is present, Asset Accountant if Non‑Cap spend over a threshold).
- Use supplier invoice retention, spend freezes and budget checking where appropriate to prevent over‑spend.
When spend is pre-controlled via POs and supported by smart defaults, AP can focus on exceptions instead of hand-coding invoices.
Bringing it together: clean P2P, clean AP, clean reporting
When Suppliers, POs, Invoices and Spend Categories are aligned, a few powerful things happen:
- Employees use a simple, guided flow to request what they need.
- Approvers see Spend Categories, Suppliers and Worktags that match budget and policy.
- AP sees consistent invoices that largely match POs and require minimal recoding.
- Finance sees spend by supplier, category, cost center and project in Workday reports without exporting to elaborate spreadsheets.
To keep it that way:
- Regularly review top Spend Categories and suppliers by volume and value; adjust category structure and supplier strategy accordingly.
- Audit Worktag errors and exceptions to improve templates, document rules and training.
- Keep P2P business processes as simple as possible while still meeting control requirements—too many steps or approvals push people to bypass the process.
Designing spend in Workday is ultimately about building a controlled, data-rich flow from request to payment. With the right Suppliers, POs, Invoices and Spend Categories, Workday becomes the place you actually manage spend, not just a system where you record it after the fact.
