How does Workday track intercompany transactions?

Workday tracks intercompany transactions primarily through the use of intercompany worktags and settlement rules. The intercompany worktags help to identify and categorize transactions that occur between different entities within the same organization. This feature enables accurate tracking and reporting of financial data at both the consolidated and individual entity levels.

Settlement rules further facilitate the interaction by defining how these intercompany transactions will be settled, ensuring that they are recorded accurately and completely in the accounting system. This structured approach minimizes the risk of errors and helps maintain compliance with accounting standards, which is crucial for organizations operating across multiple legal entities.

Other methods, such as manually adjusting journal entries, introduce a greater risk of error and inefficiency, making them less effective for systematic tracking. Default cost centers may be relevant for internal allocations but do not specifically address the complexities associated with intercompany transactions. Payroll integrations can involve intercompany elements, but they do not encompass the comprehensive tracking required for all intercompany transactions.