With detail tagging just around the corner for Wave 1 filers, the initial filing for Wave 2 this year, and Wave 3 filers starting to get on board, it is critical that accountants continue their education on XBRL and their current vendor.
Yes, I represent one of these vendors, Rivet Software. Yes, I do have a bias. But I am a Certified Public Accountant (CPA-13440) and have a strong loyalty to my fellow accountants. We are always under constant scrutiny and are asked to do more with less. We are once again in the hot seat with XBRL. We are asked to either absorb this function in-house with no additional resources, or outsource it to a printer/vendor and hope it gets done correctly. Either way, we can’t outsource compliance, so how do we ensure a proper filing with the SEC that gives an accurate representation of our company’s financials?
There is no getting around it, we must learn XBRL and get involved in the XBRL process. One thought is that we are usually scrambling to get CPE, why not get it done early and take some XBRL classes? Unfortunately, that’s not enough to get completely up to speed. So here I sit, a representative of Rivet Software, yet determined to get the word out to my fellow accountants and CPAs that we are in the hot seat – we must take ownership of the XBRL process.
I decided to talk with some of Rivet’s current Wave 1 clients to ask them if you could start all over again with XBRL, what would you do different. I focused on clients that started XBRL with a printer or other vendor and moved over to Rivet for their upcoming March filing and detail tagging. I got lots of feedback and found that it all fell into the following categories: Outsource versus do-it-yourself, cost, service, software, analysis, and most important, scalability/going concern.
- Outsourcing versus do-it-yourself: Wave 1 filers recognized they needed help from their XBRL vendor when they first started, but now that they have been at it for awhile, they want the option to bring it in-house after detail tagging gets under way. If you are a Wave 2 or 3 filer, you may not want anything to do with the XBRL requirement now, but as I stated before, you can’t outsource compliance. Therefore, look for a vendor who will let you bring the function in-house using their software if you change your mind in the future.
- Cost: Get a 3 to 5 year cost analysis from your current or potential vendor. If it is included in the cost of your printing services, I can assure you that you will pay for it somehow. Ask them to carve it out and define the XBRL portion for you. Ensure that extensions and changes are not an additional charge. This and other hidden fees can add up quickly.
- Service: Select a vendor who has an XBRL staff of accountants and CPAs who specialize in your industry and know what you are up against. For Wave 1 filers this is that much more relevant as you start your detail tagging process. Make sure that you talk directly to these individuals and not a service desk as this can cause long turnaround times and errors.
- Software: Even if you never want to bring XBRL in-house, you must evaluate your current provider’s software for both block and detail tagging. Keep in mind that XBRL is created in a language called XML. Theoretically, a vendor could have a staff coding your financials without your knowledge or consent. I am not insinuating that this is currently being done in the market place, but we are in the hot seat to make sure, aren’t we?
- Analysis: Your XBRL provider should be able to produce peer to peer comparisons and benchmark reports using XBRL at no additional charge. After all, we are going through the headache of complying with the mandate, shouldn’t we receive some benefits?
- Scalability/going concern: Will your vendor be around in a year or are they just riding the XBRL wave?
I also found that there was an original central belief for the Wave 1 filers that going with their printer would be safe. XBRL was new and no one wanted to lose their job over a botched XBRL filing, right? Unfortunately, all the points discussed above started to become issues as the process continued. We all know that printers know printing inside and out. How is it that they also know XBRL? Are they as focused on XBRL as the other functions of their business? I am not implying that printers can’t do XBRL, but it is our responsibility to insure XBRL is done accurately, timely, and cost effectively. We must do our due diligence. XBRL is changing what companies expect from us accountants and we need to step-up, accept our hot seat, and get to work.
Tags: Accountant, CPA, Detail Tagging, Outsource, Printers
