Everywhere you go you see people with smartphones and tablets. Even airline pilots have traded in their binders containing airport and aviation charts for the new “Electronic Flight Bag.” In the process, they’ve saved an average of 40 pounds of carry-on weight per pilot and an estimated $1.2 million in annual fuel costs. American Airlines has 12,000 pilots; that’s an astounding 12,000 iPads! This is yet another way technology has moved beyond the folks in the back office.
Nowadays, employees at every level are being assigned mobile technology. For instance, Sears has even assigned mobile devices to sales associates so they can easily check prices and inventory levels. From construction workers to field service repair technicians, more employees than ever before are being given mobile devices to look up schematics for machines, engineering drawings, and to share their work with a central office. Even NFL teams have assigned mobile devices to players with all of the plays they have to memorize for the season. Think how easy it’s become to access real-time information from a mobile device and send it out to other users instantaneously.
This accessibility certainly makes things easier for users, but also poses a potential accounting nightmare. It could be problematic to track these devices and properly record the costs and depreciation amounts to the correct departments and cost centers within an organization.
Workday Financial Management has come up with a solution: their Business Assets feature. Workday has made it so that all business assets can be logged according to accounting rules and tracked according to business use through a feature called Custodianship. With this feature, Workday has enabled users to leverage employee information when needed to track assets, in addition to recording the financial impact of their transactions. You also track non-cost assets such as an employee badge or assets whose values increase over time, as artwork does.
It works like this: through Workday Human Capital Management, a new hire is assigned to a cost center. When they are issued a new asset, such as an iPad, their assigned cost center incurs the costs associated with the iPad. In fact, it’s more intricate than that. All accounting information assigned to the iPad is booked to the cost center of the person to whom it was issued. When the custodianship of the iPad changes (say the iPad is assigned to another employee), the system books the depreciation costs to the cost center of the new custodian of the iPad automatically. This way, all future bookings of depreciation for the asset are set to record to the new cost center without any changes to the accounting configuration.
Under the umbrella of Business Assets, it’s also useful to know that each Workday asset record or object contains information on the custodian and the accounting assigned to the asset, such as Depreciation Profile, Method, Convention, Useful Life, etc.
And in addition to showing the Cost Detail, it also shows something that all accounting professionals will find impressive: the Depreciation Summary and Depreciation Detail in two separate tabs on the asset record. This shows the amount to be depreciated for each period for the life of the asset. The Depreciation Detail provides details on the Cost Center, Division, Location and/or Region with which the asset is assigned through Workday’s Worktag feature. Most importantly, the Depreciation Detail is something an organization defines in order to meet its needs. Workday Financial Management also provides allocations that allow certain transactions to be directed to one or more cost centers. So say, in the case of an equipment purchase, you could have the cost assigned to the IT Department Cost Center, the employee’s Cost Center, or both.
In the following video, I demonstrate how business assets are attached to employees through Custodianship.