To ease US energy companies’ shift towards an XBRL-based filing system in compliance with the FERC XBRL mandate, the energy regulator recently extended the deadlines for the first XBRL filings to be made by the companies.
The deadlines for third-quarter filings by electric utilities, natural gas, and oil pipeline companies have been pushed to December 31, 2021.
The first step toward the new filing system is the choice of an XBRL filing software. This article provides a checklist that US energy companies can use to pick the right FERC XBRL mandate compliance software.
Some energy companies might already be familiar with XBRL filing software because they have been filing financial statements with the SEC in the XBRL format. However, if you are dealing with the XBRL format for the first time, our article will help you not go wrong with your choice of software.
It might also help to recall that the FERC XBRL mandate comes as a boon both for the energy regulator and energy companies. The regulator is no longer required to provide the platform for companies to file their financial and operational information, while the companies will find the XBRL-based system to facilitate swifter, and more importantly, hassle-free filings with the FERC.
Here’s a five-point checklist to help you
Check for the right credentials and certification
Effective compliance with the FERC XBRL mandate hinges on the track record and accreditations of the XBRL software and service provider that you as an energy company choose. It would help to check how long a software vendor has been in the XBRL space, how many XBRL specialists the vendor has among its employees, and the number of XBRL filings the firm has managed in the past. One way to go about this is to check if the XBRL software is XBRL International certified and if the vendor is a member of jurisdiction such as XBRL US.
Check for testimonials and customer references
Does an XBRL software vendor have positive testimonials from current clients? Are there reference buyers from the energy industry that one can talk to? Are there references from firms who use the same XBRL software for filings with the SEC? Testimonials and references from current customers are perfect for knowing if the XBRL software vendor under your consideration can be entrusted with your FERC XBRL mandate compliance.
Choose software that eliminates XBRL tagging completely
XBRL reporting requires the mapping of data fields to XBRL tags in the FERC taxonomy. Make sure the software you are evaluating always uses the latest version of the FERC taxonomy. Some XBRL solutions have an auto-tagging feature that performs most of the tagging, but the real deal is software that requires no tagging whatsoever. You read that right! Your XBRL filing could be as simple as uploading a spreadsheet onto the platform. XBRL tagging is taken care of by the platform. Can compliance with the FERC XBRL mandate get simpler than this?
Choose software that simplifies the transfer of data
The Visual FoxPro-based filing system involves a manual keying in of numbers, which is a painstaking process. And there is no guarantee numbers stay in place until you are done with the process. In selecting your FERC XBRL mandate compliance software, check for one that allows you to upload or copy-paste data from an MS Excel worksheet. You can also ask if the software would allow you to draw data automatically from your internal ERP systems using APIs.
Ensure availability of expert XBRL support
A new filing requirement such as the FERC XBRL mandate often needs extra careful observation and implementation. Make sure the XBRL software provider would be able to offer you support and expert assistance when you need it the most. Check if the Software provider operates in your time zone and ask how you can reach the support teams — whether through a phone call, email, or online chat. Also, check if extra hours of support would involve additional charges.
A few miscellaneous checks
- Make sure your XBRL solution keeps control of all your E-form submissions. Also, check if it can get notified in time to complete the compliance process.
- Check for the platform’s ability to re-submit a filing and maintain complete records of each submission.
- Check if you can roll forward filing data from previous periods into your current filing with ease.
- Make sure your software provider rolls out timely upgrades to improve the functions and features of the filing platform.
There is no doubt the FERC XBRL mandate is bound to make your regulatory compliance a more comfortable affair and lead to a more intelligent future for energy companies, the FERC, and investors. However, the importance of exercising care in choosing an XBRL software cannot be stressed enough. Your decision would have a bearing on how hassle-free your filing process is going to be going ahead. Do stay tuned in for our next article, which talks about how you can plan for a smooth transition to the FERC XBRL filing regime.