With January 1 fast approaching and many public organizations still undecided on how they plan to address their 2011 XBRL requirements, let me pass along some interesting feedback I’m hearing in the field on a regular basis.
From companies who have already been through their XBRL Year 1 requirements, the responses are all pretty consistent, regardless if they outsourced XBRL to a printer or used some sort of "bolt-on" in-house tool:
Year 1 (used printer or bolt-on): “A bit of a nuisance getting up to speed and implementing, but overall nothing life shattering.”
The Verdict: "Made it through Year 1 unscathed and hoping for a similar result in Year 2. Not problematic enough to prompt us to change directions at this point.”
Now, from companies who have already been through their XBRL Year 2 requirements, those responses are all consistent as well, only with a much different tone:
Year 2 (used a printer): “Nightmare. Pencils-down requirements far too early in the process, slow turn time once it’s in their hands, extremely difficult and costly when factoring in EDGAR and last minute changes, and overall the expertise level was surprisingly less than what we expected. I shudder to think about the increased difficulty these printers will have when the number of companies required to submit XBRL Year 2 over the next two years multiplies significantly.”
The Verdict: "Consider us officially shopping for something better."
Year 2 (used a bolt-on in-house tool): “Complex implementation, limited training and support, frequent version upgrades required, and still doesn’t solve any existing in-house inefficiencies surrounding EDGAR, team collaboration, and version control.”
The Verdict: "Regarding the cheap bolt-on in-house options, you clearly get what you pay for. Regarding that other ridiculously expensive bolt-on option (you know who)…how dare they!"
Conversations just like these are happening on a daily basis, with portions of the above comments being verbatim from real people tasked with addressing XBRL, and fixing otherwise outdated and broken SEC reporting processes.
The bottom line here is this: The printers are not ready for you, nor are they equipped with the tools and expertise to help you scale XBRL the way you need to. Regardless, even if they were ready, you cannot and should not outsource compliance.
“Bolt-on” solutions, on the other hand, do not address the entire reporting process and the abundance of inefficiencies that plague most organizations. “Bolt-on” might as well be called “Band-aid”, because it is nothing more than a singular patch for a singular problem; a patch that needs to be upgraded frequently, can be difficult to apply, and, in the end, may stop the bleeding but doesn’t heal the wound.
Conversely, WebFilings is a “built-in” solution – an end-to-end cure for your entire process, requiring no upgrading, no heavy lifting from your IT department, no “pencils-down,” and no waiting in line as your filing deadline looms. Best of all, WebFilings is a 90 day commitment, not 36, 24, or even 12 months. You have the ability to “kick the tires,” so to speak, whereas with other options, you’re either locked in for years on end, or you’ve bought it, you own it, there is no giving it back.
The right decision for your company really isn't that difficult at all. It is right in front of you, all you have to do is make it.
Will XBRL Break Your SEC Reporting Process?
The ‘Close to SEC Acceptance’ cycle and process puts companies under considerable pressure due to compression of time, additional regulations and ever-changing US GAAP requirements.
Companies are now facing additional pressure on this critical, but somewhat fragile business process. Some companies will find the addition of XBRL tagging and reporting so stressful that they will be stretched to the breaking point. The options: outsourcing or pulling the process in-house.
Register for this webinar to learn how WebFilings can save you time and give you back control by keeping your entire process in-house from financial close to SEC acceptance.