6 Ways to Supercharge Enterprise Collaboration Between FP&A and Accounting Teams

Interest rate pressures, geopolitical complexities, the persistently tight labor market: uncertainty in the economic climate looks to continue for some time even as inflation eases, according to KPMG’s recent forecasts. That points to the urgent need for accounting and financial planning and analysis (FP&A) teams to work more cohesively, helping their organizations navigate the thorny issues of a quickly changing world.

This reality became exceedingly clear with the pandemic, when Workday saw a thirtyfold increase in the number of plans created with Workday Adaptive Planning. “Folks went from being able to get away with annual or quarterly plans to needing weekly and daily reports to make sure they could survive,” said Tom Peff, senior director, product marketing, Workday.

During a recent Workday webinar “Friend or Foe? Bring FP&A and Accounting Together to Execute New Strategies Quicker,” Peff moderated a discussion between Melissa Kullander, Workday vice president of finance for products and technology, and Patrick Hoynes, Workday financial controller. Kullander and Hoynes explained how their teams use Workday Enterprise Management Cloud to become more aligned, agile, and adaptive. They also discussed the benefits a stronger finance function brings to the organization as a whole.

1. Taking the Pain Out of Determining Useful Equipment Life 

Evaluating the useful life of equipment may never be the flashiest of tasks, but it’s a key component of running a healthy organization. After evaluating the useful life of our servers, Workday determined we needed to increase the useful life of hardware equipment from three to five years—a project that would involve changing tens of thousands of records in the system. 

For this initiative, finance couldn’t simply rely on high-level estimates. “If you change your server’s useful life, you need to have the exact numbers, both to close your books and to know next year’s budget,” Kullander said. “And then you need to operationalize that.”

To manage the change, the accounting team first modeled the scenario and tested it on the Workday platform. “And because we had tested it, we knew what to expect,” Hoynes said. The change to useful server life was implemented and operationalized in just a few hours—“a great example of our collaboration,” Kullander added.

2. Producing Real-Time Cash Flow Reporting and Forecasting

Waiting for information often means dated information. With a unified system, Workday teams don’t have to wait; we can run direct cash flow statements on a daily basis. And instead of relying on broad-stroke spreadsheets, teams can instantly compare bills sent with payments received. That allows the organization to understand what will happen with cash flow the next month or week—or even the next day. And with “worktags,” finance teams can make every transaction highly searchable and reportable.

“It’s an amazing ability for us to use the system to get to a level of detail so we can make real business decisions, as opposed to waiting for data to come in,” Hoynes said.

3. Boosting Collaboration With the Treasury Team

It’s been an interesting time for exchange rates, to put it mildly. Changing rates have had a dramatic impact on Workday’s exposures. Fortunately, Workday Enterprise Management Cloud provides timely reporting that helps teams understand the company’s foreign currency exposure—allowing the treasury team to lessen risks via hedging activity. These insights also allow Workday’s local business clients to mitigate the risk of having too much cash in a specific currency while having enough funds to continue their operations.

“It’s a great opportunity for us to collaborate and provide information for our business to make good, solid decisions,” Hoynes said. “And the results speak for themselves: We can hedge most of our exposures throughout our organization.” 

4. Getting Visibility Into the Close

When organizations rely on legacy enterprise resource planning (ERP) systems, accounting and FP&A must deal with separate, siloed data sources—in effect, two separate versions of truth. Workday’s platform instead provides a single, shared source of truth. This allows teams to know where the close activities stand at any moment. This capability has been particularly helpful with remote and hybrid workers, and it allows organizations to track their progress toward a zero-day close. When a team can’t quickly huddle in a conference room, they can use Workday’s platform to access the same up-to-date information.

Another benefit? If any close activity is late, a status update doesn’t mean having to pull together the entire team. Instead, if an activity falls behind, the accounting and FP&A leads are notified, and they can pinpoint the problem and alert the relevant team members. FP&A also is continually informed as accounting team members submit their entries, so finance knows when it can and can’t see the budget versus actuals.

“I can see how things are closing in accounting, which tells me if my finance team is going to be on track or not,” Kullander said. “With tight windows between closing and forecasting, we need to know right away if something’s behind.”

5. Simplifying Headcount

“No finance person ever wants to spend more time on headcount,” Kullander said. But that’s exactly what legacy systems force finance teams to do.

Through all the workforce churn of recent years, the finance function must always have a firm grasp of headcount so it can budget and plan accordingly. Legacy systems with disparate sources of data lead to reconciliation issues, but with Workday, both finance and human resources use the same data through the seamless integration of financial planning and human capital management tools.

Instead of two sets of data, Workday has one. So finance always has a complete, correct view of current headcount. “We speak the same language,” Kullander said.

6. Using AI and ML to Support the Workforce

With artificial intelligence (AI) at its core, Workday Enterprise Management Cloud supports accounting and FP&A teams in two primary ways. First, it allows workers to process transactions, such as scanning vendor invoices, much more quickly. Second, teams can use predictability features and tools to better understand transactions and balances and to more effectively predict costs and create forecasts.

“Computers can do a significant amount of information gathering for us. We see AI and machine learning (ML) as coworkers—not a replacement for headcount,” Hoynes said. “It’s another tool we can use to do our jobs more efficiently.”

Watch the full webinar of “Friend or Foe? Bring FP&A and Accounting Together to Execute New Strategies Quicker.”