Workday Accounting
If Workday is the brain of your finance system, the accounting backbone is its spine: Companies, Ledgers, Worktags and Posting Rules. When these four are designed well, every supplier invoice, customer invoice, expense report and journal flows cleanly into the General Ledger, and your reports match how the business actually thinks. When they are not, you get mispostings, reconciliation headaches and a long queue of “please fix my coding” tickets.
This guide walks through how to think about and explain that backbone in Workday language, but in a way that finance and accounting teams immediately recognize.
Companies: the legal and reporting anchors
In Workday Financials, Companies (sometimes called Company / Entity) represent the legal or accounting units where you keep books and produce financial statements.
From a finance perspective, a Company is:
- A legal entity that needs its own statutory accounts.
- The core object Workday uses for balance sheets, P&Ls and trial balances.
- The anchor for settings like functional currency, year-end close rules and consolidation.
Key design decisions:
- Define one Company per legal entity that reports separately (for example, “US Corp”, “India Pvt Ltd”, “UK Ltd”).
- Use Company Hierarchies to group companies for management reporting and consolidation (e.g., “EMEA Region”, “Global Consolidation”).
- Make sure every operational process (Procurement, Expenses, Customer Invoicing, Projects) is configured to capture the right Company on each transaction.
Once Companies are set correctly, finance users can filter reports by entity and trust that every transaction belongs to the right legal book.
Ledgers: where the accounting happens
If Companies answer “who,” Ledgers answer “which book.” In Workday, ledgers hold accounting entries for a Company.
Typical patterns:
- A Primary Ledger per Company, which holds your main accounting entries.
- Optional additional ledgers for adjustments, local GAAP vs. group GAAP, or management-only entries.
In daily work you see ledgers in:
- Journals – you pick the ledger (often implicit via Company) and accounting date/period.
- Financial reports – you can specify which ledger(s) to include for a given statement.
For most non-technical users:
- You do not configure ledgers yourself, but knowing which ledger a report uses (Primary vs. Adjustment) explains why numbers may differ from other tools.
- You can be confident that all subledger activity (AP, AR, Expenses, Projects, Payroll) ultimately posts into the ledger defined for that Company.
Think of the ledger as the “book” your external auditors care about; everything else is just detail feeding into it.
Worktags: replacing account strings with smart labels
The real Workday magic for accounting is Worktags. Instead of long account strings (Company–Department–Account–Project…), Workday uses Worktags as flexible labels on each line.
Worktags:
- Classify transactions for financial, operational and external reporting.
- Can be assigned to any line that generates a financial update: requisitions, invoices, expenses, time, journals, payroll, etc.
Common Worktags in many tenants include:
- Cost Center – the department or unit owning the cost.
- Fund / Program / Grant / Project / Gift – funding or project dimensions, often called Driver Worktags.
- Spend Category – what you are buying (e.g., Office Supplies, Travel – Airfare), analogous to an expense account.
- Revenue Category – what income you’re recognizing (e.g., Product Revenue, Service Fees).
- Location, Assignee, Custom Worktags – extra slices for where and who.
Important concepts:
- Driver Worktags: the main Worktags users pick (for example, Project or Cost Center). These trigger Related Worktags to auto-populate, making entry easier and more consistent.
- Related Worktags: automatically filled-in tags tied to the Driver (for example, choose Project → default Cost Center and Program appear).
For the AP team, expense users or journal preparers, this means:
- You focus on choosing the right Worktags instead of trying to remember a long string of codes.
- Changing one Worktag (e.g., Project) can automatically adjust related tags, keeping combinations valid and reportable.
Posting Rules: the engine translating worktags into accounts
Behind the scenes, Workday’s Account Posting Rules (often described as the “accounting rules engine”) take those Worktags and decide which Ledger Accounts to use.
Key idea:
- Users pick Worktags like Company, Cost Center, Spend Category, Project.
- Posting Rules map those combinations to ledger accounts and build the debit/credit lines for the journal.
Examples:
- Entity: US Corp + Spend Category: “Office Supplies” → Debit 640000 (Office Supplies Expense), Credit 200000 (AP).
- Entity: India Pvt Ltd + Spend Category: “Travel – Airfare” → Debit 642100 (Travel Expense), Credit 200000 (AP).
Benefits:
- End users no longer select ledger accounts directly; they select the business-friendly Worktags, and the system applies consistent accounting.
- Finance can centrally manage accounting logic without retraining every user when accounts or rules change.
From a design perspective:
- Account Posting Rule Sets should mirror your chart of accounts and key Worktag dimensions.
- Changes to accounting (for example, moving certain spend to a new account) are made in rules, not transaction screens.
How it all comes together in a transaction
Let’s walk a basic supplier invoice through the backbone:
- Company / Entity
- Worktags on the invoice line
- Cost Center: “Sales – East”
- Spend Category: “Travel – Airfare”
- Project: “Project X” (as a Driver Worktag, auto-filling Cost Center and maybe Program)
- Posting Rules
- Workday’s Account Posting Rule Set sees Company + Spend Category (and possibly Project/Fund) and maps to the correct expense and AP accounts.
- Ledger
- The system posts the resulting journal to the Primary Ledger for US Corp in the appropriate period.
The AP user only needed to know: the correct Company and Worktags. The complex accounting logic happened automatically and consistently.
Design tips for a strong accounting backbone
When setting up or improving your backbone, a few principles help:
- Start with your Foundation Data Model (FDM)
- Align Companies, Cost Centers, Programs, Projects and other Worktags to how the business actually manages and reports.
- Treat FDM design workshops like building the foundation of a house: get them right before everything else.
- Keep Worktag usage clear and controlled
- Centralize Posting Rules ownership
- Assign accounting or finance system owners to manage Account Posting Rule Sets.
- Test new rules with sample transactions before moving them to production to avoid mispostings at scale.
- Train users on Worktags, not on GL codes
- Provide quick reference guides showing which Worktags to use for common scenarios instead of giving them the chart of accounts.
- Show how Worktags appear in reports so users understand why accurate tagging matters.
When the backbone is clear and users know their part, finance can shift from fixing coding errors to analyzing the business.
A well-designed accounting backbone in Workday – with clean Companies, structured Ledgers, thoughtful Worktags and robust Posting Rules – turns Workday into a reliable single source of truth for finance. Transactions flow from operations to the GL with minimal manual intervention, and your reports finally reflect the real story of the business without endless offline rework.
