The December 2008 announcement by the SEC has been cause for celebration in the XBRL community, especially among the smaller software vendors who’ve been waiting for this reporting standard to be mandated for quite a while now. We should see the big software vendors like IBM, SAP, Oracle, and Microsoft jockeying for position as their customers begin XBRL reporting rollouts. However, it will soon be some time before we see consolidation in this marketplace. Even though XBRL ‘s been around considering that the late 90’s, it’s only the recent SEC mandate and to a lesser degree, the roadmap for adoption of the IFRS standard, that’s fueling the present interest in XBRL reporting. In speaking with CFOs, COOs, and Accountants of both public and regulatory companies, I’m discovering that there’s still confusion about where in the first place an in-house XBRL implementation strategy, what the primary ingredients are, or when to join the bandwagon. Furthermore, the needs of public companies are very different from the needs of the organizations that regulate them.mca xbrl software
As a Technology-based Solutions Consultant advising and delivering ERP, e-commerce, and Business Intelligence (BI) solutions for large organizations over the past 20+ years, I have observed first-hand, how easy it’s to try to be everything to any or all people. A fresh technology evolves, vendors emerge in the space, and although each vendor has their own strength, they often portray themselves as having the silver bullet, as opposed to in partnership with each other in order to provide the most effective value for the customer.
In the financial services community, prospective customers of XBRL products and services typically fall within 1 of 2 classes – 1. public or regulated corporations and 2. regulators or other organizations involved with data collection and consolidation. (Let’s leave the common investor on the sidelines for now. As their only requirement is to see company reports, they’ll have their needs met by free downloadable XBRL report viewers.)
In this first of two articles, I will focus on the implementation needs of people or regulated company. My follow-up article will focus on the XBRL implementation needs of regulatory organizations.
For companies that have to comply with regulatory bodies, (or private firms that are often regulated and have to offer reports in XBRL format), the technology enablers for incorporating the XBRL reporting standard into their businesses are on the market on the list of XBRL vendors – UBMatrix, Corefiling, Fujitsu, ABZ Reporting, Rivet software, Coyote Reporting, Snappy Reports, to name a solid core. (NOTE: I’m not endorsing the companies I’m mentioning in this article. I’m just providing them as types of the vendors in this marketplace.)
XBRL integration is fundamentally a three-step process. Import/extend a taxonomy (a business rules data dictionary) which creates the XBRL “tags” for the reporting structure; run your computer data through the tagging process, making use of your taxonomy; finally, render the data in a user-readable format.
The XBRL vendors have created three automated off-the-shelf products to assist you complete these steps with minimal pain:
1. Taxonomy Designer – which gives a user-friendly online interface to allow you to build, import, and extend reporting taxonomies. This is your “tagging” tool. And there are certainly a wide variety of these tagging tools out there. You can even find a totally free one once you learn where to look. I would suggest you acquire a Taxonomy Designer that’s drag-and-drop capability and lets you import and extend a platform taxonomy that’s downloadable from the Internet or provided for you by an associated company or regulatory body. Make certain this tool also comes with built-in taxonomy validation at both the beds base and extension level.
2. Processing Engine – which uses your taxonomy to essentially map the conversion of reporting data from text, CSV, Excel, HTML, XML, etc. format into XBRL. I would recommend purchasing a motor that provides for two-way conversion. So starting with XBRL, you can convert back once again to whatever source you began with, or to some other standard format. Search for an Engine with built-in data validation functionality or be sure that data validation comes bundled along with your Report Builder (next step), i.e., to flag unbalanced accounts. This could save you lots of manual effort and frustration.xbrl software price
3. Report Builder – lets you render (display) XBRL “instance” documents”, or individual financial reports in a user-friendly format for the net, in PDF, or to MS Excel or Word formats, etc. Again, this requires your taxonomy as input, combined with the report data, in order to render the report in a structure that people can read. These report builders differ quite a bit with regards to functionality. Some provide web rendering capability only; some render in multiple formats including Word, Excel, and PDF; others provide parameter-driven comparison capability. Be clear on the functionality you need. This puts you in a position to negotiate the price of the tool you finally select.