Using the Case Study Accounting for Customer Solicitation at Workday, Inc. Answer the following questions:

What services does Workday provide to its customers and how does the company generate revenue streams? What are the critical success factors in the company's business?

How successful has Workday been recently? What is your assessment of the company's financial performance? How is the cashflow performance?

How should Workday's management respond, if at all, to the criticism that its policy of capitalizing and amortizing sales commissions distorts the company's financial performance?

How do you think an Enterprise System like SAP could help Workday is tracking, measuring their financial results?

Summary of Article:

Recently, software-as-a-service (SaaS) companies have attracted considerable attention from the investment community because their services were sold to customers on a subscription basis and services were delivered over the internet through applications on mobile phones, tablets and other portable devices. Because software provided by SaaS companies required considerably less investment in infrastructure (servers, software engineers) than traditional software vendors such as Oracle and SAP, they were affordable to far more companies. And because of a much larger total addressable market, over 200 SaaS had gone public through initial public offerings (IPO) in the last five years to take advantage for the demand for SaaS applications by small and medium-sized companies. Southern Cross LLC, an investment fund with over $20 billion under management, had established a SaaS portfolio to which it planned to add several high quality companies. Once such company under consideration was Workday, Inc. Workday provided cloud-based human capital management (HCM) and financial management (FM) computer applications to customers for an upfront subscription fee. Southern Cross had assigned Andrew Ferris, a recently hired MBA graduate, to evaluate Workday. Workday solicited customers for its software offerings through its direct sales organization. Southern Cross's portfolio manager had asked Ferris to scrutinize the company's accounting methods, particularly its revenue and expense recognition methods. Upfront revenue recognition and capitalizing and amortizing some indirect outlays were well known methods for enhancing a company's bottom line.