By Dan Haigh
I read a recent article in Forbes.com about American Airlines purchasing iPads to replace pilots’ flight bags and saving an average of 40 pounds per pilot and an estimated $1.2 million in fuel costs yearly. Each pilot will receive this new “Electronic Flight Bag”. American Airlines has 12,000 pilots; that’s an astounding 12,000 iPads! This is yet another example of how technology is no longer strictly used by the folks in the back office. More and more employees at all levels are being assigned mobile technology. Sears has even assigned their sales associates in the appliance department a mobile device for them to check prices and inventory levels of their various appliances. From construction workers to fields service repair technicians, more employees are being given mobile devices to look up schematics for machines and engineering drawings, and communicate their work to a central office. In fact, I understand some NFL teams have assigned iPads to players that contain all the plays they must memorize for the season. Think of how easy it now is to update all the information contained in these iPads and send that out to users instantaneously.
This certainly makes life easier for the people using the devices, but it also represents a security threat and a potential accounting nightmare in trying to track these devices and properly record the costs and depreciation amounts to the correct departments and cost centers within an organization.
The solution is the Workday Financials Business Asset feature. Workday has separated business asset accounting from business asset tracking, which allows for all business assets to be accounted for according to accounting rules and tracked according to business use. The key feature is that Workday has provided the ability to leverage employee information when needed to track assets in addition to recording the financial impact of their transactions
It works like this: Through Workday HCM, a new hire is assigned to a cost center. When he is issued a new asset, such as an iPad, his assigned cost center incurs the costs associated with the iPad. Here are some other cool features: all accounting information assigned to the asset is booked to the cost center of the person to whom it has been issued. When he moves from one cost center to another, the system books the depreciation costs to the new assigned cost center automatically. This way, all future bookings of depreciation for the asset are set to record to the new cost center without any changes made to the accounting configuration.
Another neat feature is that each Workday asset record or object contains information on the custodian, the accounting assigned to the asset, such as Depreciation Profile, Method, Convention, Useful Life, etc. It also shows the Cost Detail, and something that all accounting professionals should really be impressed with- it shows 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 their Worktag feature, so this is something an organization defines to meet its needs! Workday Financials also provides allocations that allow certain transactions to be directed to one or more different cost centers. So, in the case of an equipment purchase you could have the cost assigned to either the IT Department Cost Center or the Employee’s Cost center or both.
Watch this quick video demo to see Workday Financial Business Assets in action:
Hopefully this post on business assets has been helpful. Stay tuned for next month’s follow up post for more Workday Financial insights on the ease of drilling down to line item details from financial statements.