From the hallowed grounds that gave us fabled companies like Nokia and Kone comes Basware Corporation, a Finnish software company crafting enterprise software, primarily in the procure-to-pay space. With operations across 50+ countries on over six continents, its reach is as expansive as its pedigree. They have especially keen expertise in the automation of procurement and cloud invoicing, and thus aim to reform the way in which B2B interoperability can be achieved. For a company working with such avant-garde technologies, it came as no surprise when they decided to adopt the ESEF iXBRL reporting format for their 2020 annual report.
How Basware prepared for their first ESEF filing
For Basware, the move to ESEF did not happen overnight. A small group led by got together at the end of 2019 to deliberate on how best to comply with the new reporting mandate. After some measure of initial planning internally, they decided to meet with external service providers in the early months of 2020.
Five demos later, they finally had a critical decision to make. As with any new technology, there were apprehensions and misgivings about everything from the conception to the implementation of the product and its ultimate result.
Their immediate instinct inhibited them from using a SaaS platform to outsource their ESEF iXBRL filing needs and they decided to do it in-house. As there were no XBRL experts in the firm, an effort was made to learn from scratch.
However, it quickly became evident that a specialist with domain knowledge would almost certainly be required to take this exercise forward. Riku and his team then met with 3 service providers of the 5 they had considered previously.
Of prime importance to them regarding the service were 4 key attributes:
Usability: The software had to offer easy navigation and an uncluttered user interface.
Practicality: The software had to work out of the box and deliver results as promised.
Flexibility: The software had to have room for outsourcing tasks at a later stage.
Pricing: The software had to be cost-effective
Of the 3 service providers, Basware considered, only IRIS CARBON® checked all four boxes. And since IRIS CARBON® is a global player with a reputation for quality XBRL filings, the choice was not hard. Basware did not pay heed to the ESEF filing postponement notification. They understood that this was an activity that needed to be undertaken sooner than later and that it was perhaps wise to jump ship at the earliest.
Working closely with Riku and Janina from the finance team, IRIS CARBON® led a two-day training session for Basware. They were familiarized with the product features and how to use them to produce their final ESEF iXBRL report. Using a document from 2019, IRIS CARBON® worked alongside Basware to tag their statements as well as produce the final xHTML report — after the XBRL side of the document was validated by IRIS Bushchat, the validator in built with the IRIS CARBON® platform.
This finished report was then sent to the company’s auditor for the second round of validations. Barring a few minor adjustments, their auditor had no issues with the final output and subsequently validated it from their end.
Now, using this report as a base, the IRIS CARBON® team proceeded to tag Basware’s 2020 financial statements — a much quicker process since the groundwork had already been laid. Minor changes that came from Basware before the final submission to the OAM included formatting and grammatical changes. This final submission was validated promptly by the OAM and Basware’s first ESEF iXBRL filing was now complete. Basware went one step beyond and published their 2020 Annual Report in ESEF iXBRL format on their website.
Implementation and learnings
“Filing with IRIS CARBON® was an absolute breeze and everything worked smoothly. We got what was promised and the quality was good. It is easy to work with professionals who put their clients’ needs as a top priority”, said Riku Jarvela of Basware Corporation after becoming IRIS CARBON®’s first-ever ESEF issuer.
Basware’s ESEF filing was their first brush with the entire ESEF filing process and its ground realities. “It has been a great learning for our entire team on the dos and don’ts of ESEF filings, allowing us to improve on our own internal processes”, Riku said after they had completed their ESEF iXBRL filing. His advice to those watching from the bleachers: Don’t hold up. Dive right in!
Riku lays out 4 pointers for future ESEF issuers:
- Do a dry run with an older annual report as it provides invaluable insights.
- Start with a draft annual report for ESEF (5 statements) and work your way forward
- Plan your calendar well in order to minimize last-minute changes.
- Communicate clearly across different teams to ensure a successful ESEF filing.
The larger ESEF filing landscape
While some of the advisories above may be specific to Basware and their ESEF filing needs, our piece on broader ESEF challenges and insights will nudge you in a more general direction towards your ESEF iXBRL reporting needs next year.
Our global experience of over 16 years helping clients with their XBRL filings shows that outsourcing is seen as a safer bet by most companies, at least for their first filings. When it comes to ESEF filings in Finland, we found that 30% of companies in Finland have i.e., 46 out of a total of 145 firms eligible to file their annual reports using the ESEF iXBRL format, have done so as of the beginning of this month.