iXBRL Software: What Helps To Convert Financial Data
Updated: Dec 7, 2021
Since the recent time, the business world actively forms financial reports following the international XBRL (eXtensible Business Reporting Language) standard. Governments, global regulators, and investors are pleased here. The new format ensures financial data wideness and accessibility, excludes their duplication, and simplifies the formation process. As you might guess, XBRL usage speeds up digital transformation. Now almost every entity needs robust software products that convert reports accurately. We offer to discover which solutions are the most convenient and why. Here goes.
How To Generate iXBRL Financial Statements: Challenges
First of all, let's catch the difference between XBRL and iXBRL.
What is XBRL: It is an international electronic markup language for reporting under IFRS, based on taxonomy's metadata.
What is iXBRL: The format has an HTML extension and embedded tags. It allows users to open reporting files through browsers. Enterprises must submit reports in iXBRL, converting files with XLS, PDF, Word, and other formats.
Over 20 jurisdictions boost a new approach to make the private sector's operation easier. However, many believe that to generate reporting according to the new rules seamlessly, a company should have streamlined business processes and a clear distribution of responsibility. This point of view relates to the following challenges that enterprises often face here:
the complexity of choosing software from a variety of alternatives;
limited knowledge of the finance department employees in the field of IT;
annual changes in taxonomy and the obligation to comply with them;
overworked IT-team and lack of time to help financiers with reporting;
an extended discussion of the allocation of responsibility areas.
Thus, it is sometimes difficult for staff to coordinate their actions to adapt to new realities. Therefore, vendors develop digital solutions that simplify the process of data entry and conversion, validation, etc.
What Is The Most Common Financial Reporting Software
Software suppliers can rightfully be called the first companies ready for innovations. Many products on the market can facilitate the work with iXBRL and ensure error-free data entry.
What is the name of the reliable software for financial reporting? - you might ask. It is difficult to determine with the leader when almost every large enterprise offers its solution.
You can choose SAP Disclosure Management or Transform SEC Filing special software. PeopleSoft, for instance, added an XBRL converter to their ERP. Google also designed Excel Investor's Assistant in cooperation with PwC. It can convert reports in a few clicks.
The governments are also not lagging. They try to provide businesses with all the conditions for seamless compliance. That is why they order vendors to develop web applications that will be free for users. Typically, links to such products are posted on special government portals.
Today, our goal is to look at two large groups of financial reporting software for public and private companies. It's about desktop and web apps.
Let's start with the first ones.
Desktop Financial Reporting Software
To operate with a desktop product, the user must first install it on the computer. Accordingly, all data will be stored on a specific device.
It is the first significant drawback of such applications. They can be reliable, but information and settings will always depend on a machine. Any problem with the equipment leads to the challenge. A company will need to solve the problem of recovery, losing time.
Moreover, desktop products are often complex. They can cover a wide range of tasks. To understand how to convert a file to iXBRL, the financier will need to understand how the entire solution works. It is not the case for companies looking for a product that performs a specific function.
One more reason why businesses try to avoid desktop solutions is periodic updates. Depending on the supplier, new versions can be released several times a year. A user needs to update the product on the computer whenever it happens. It's always arduous to re-examine changes here.
Desktop applications often require the purchase of an expensive license, which is overwhelming for many business representatives. Therefore, they are looking for alternatives.
Free Web iXBRL Software
This is where web financial performance reporting software comes to the rescue. Here you only need to have access to the network to start work. These products solve a key storage issue. All information is stored on remote servers with multi-level security. It removes the dependency on specific hardware.
To convert files to iXBRL, a clear solution is sufficient. It should perform only this function, supplemented by a validation one. The market is full of free software for such purposes. Almost all of them were created at the governments' initiative. Thus, the company does not need to monitor changes in taxonomy and wait for a new product version.
Such products are so standardized, which allows companies of any size to operate with them conveniently.
Thus, the benefits of web applications usage are obvious:
saving time of employees due to clear interface and interaction;
error-free data entry and the document verification process acceleration;
no need to install the application on the computer;
reliable data storage and protection without user efforts;
the ability to use a product on any device from anywhere in the world;
availability for any business;
provision of compliance with legislation requirements.
The Bottom Line
Corporate financial reporting software matters a lot for enterprises today. It can both facilitate and complicate the work of the finance department.
The choice of a suitable solution traditionally depends on its scale, goals, and financial capabilities. Management should also consider the level of involved employees' training.