Companies either outsource EDGAR and XBRL conversion processes to Filing Agents/Financial Printers or use SaaS Solutions to prepare their Qs and Ks internally with XBRL tagging. This is either done by the SaaS Solutions provider, a Consultant or on their own.

As the iXBRL SEC Mandate draws closer, companies would need to give some serious thought on the ‘process’ they currently have.  iXBRL is a smart HTML which has XBRL tagging embedded behind every disclosure that requires tagging. Therefore with iXBRL, both humans and machines can read the XBRL document and the report. To enable the ‘readability’ of the data, it is important that the XBRL tagging is done ‘on the face of the document’.

In this blog, we explain some distinct characteristics of outsourcing your SEC compliance process to a Filing Agent vs using a SaaS Solutions in terms of getting ready for the iXBRL mandate.

While many may speak to the overall uptake of buying SaaS solutions, there are still several organizations that hesitate to make the move. And the reason could be several misconceptions. And while we may dismiss these myths as harmless, for organizations it could mean relinquishing the opportunity to streamline their overall reporting process.

SaaS Solutions

SaaS solutions offer the best transition to iXBRL since the XBRL tagging is done on the face of the document.

SaaS Solutions offer the best transition to iXBRL, since the XBRL tagging is done on the face of the document. Let’s take a look at the benefits of using a  SaaS solutions and handling the overall process with 100% visibility and control.

saas solutions - SaaS Solutions vs Conversion Services – What’s The Best Route to iXBRL

Secure your Unpublished Reports

Unpublished Financial Data has the highest risk of Data Security. Typically companies send their financial reports to their outsourced XBRL/HTML providers through emails. Emails are the most insecure way to send across financial reports, especially if they contain highly sensitive unpublished data. Emails are prone to virus attacks and other cyber security risks. Apart from this, humans could also be a point of data misuse. The documents that you send to a financial printer are handled by multiple team members from the Financial Printer team. Data leakage by any member of the team can cause the financial printer unimaginable impacts and consequences. SaaS solutions are highly secured, the data on the cloud is encrypted, and there are security measures in place to make sure the data is accessible only to authorized users.

saas solutions - SaaS Solutions vs Conversion Services – What’s The Best Route to iXBRL

Efficient Streamlined process

The overall preparation process of compliance reports is highly iterative with tight deadlines. The need to deal with lot of numbers and text with even more edits and iterations could be daunting if you do not have an efficient way of working. SaaS solutions offer a centralized way of working where all changes done in the document reflect instantaneously in all output formats which include XBRL, EDGAR, Word and PDF. Moving to a SaaS solutions gives you confidence that you are always working on the most updated version of your documents, you can track and review not just your document but your XBRL as well.

saas solutions - SaaS Solutions vs Conversion Services – What’s The Best Route to iXBRL

Greater Visibility and Control

The traditional outsourcing of word drafts for HTML and XBRL through Filing Agents leaves you with losing sight of the document. The Filing Agent has an EDGAR team who converts the document into EDGAR HTML and an XBRL team who tag the documents. The series of drafts and edits you send to the Filing Agent is sent separately to both the teams and these teams have separate processes, resources and tools for converting documents to EDGAR HTML and XBRL. While you may send v4 of the document, the EDGAR team probably is working on v3 and XBRL team on v2. You just would have no idea at what stage your document is with the Filing Agent!

Times have changed and with advanced technology; companies are adopting the use of SaaS solutions for SEC compliance requirements. One of the biggest benefits of using a SaaS solution is that you NEVER loose sight of your compliance documents. You get a greater level of control and visibility of your documents, XBRL tagging including any last minute changes.

saas solutions - SaaS Solutions vs Conversion Services – What’s The Best Route to iXBRL

Superior XBRL Report Quality 

Since Filing Agent’s EDGAR and XBRL teams work separately, there is a good chance that any changes, especially the ones made at the last minute are missed in one of the file formats. This leads to widespread quality issues and results in incomplete and inconsistent data being reported, which  reduces comparability of the data being reported.

Here is an example where Gross Profit is reported in HTML, but not tagged in XBRL !

Extract from HTML

Extract from XBRL

saas solutions - SaaS Solutions vs Conversion Services – What’s The Best Route to iXBRL

Appropriate Tagging Method 

Since Filing Agent’s EDGAR and XBRL teams work separately, there is a good chance that any changes, especially the ones made at the last minute are missed in one of the file formats. This leads to widespread quality issues and results in incomplete and inconsistent data being reported, which  reduces comparability of the data being reported.

If your outsourcing firm uses the ‘keying in’ approach for iXBRL tagging, then you seriously need to look for other options to handle your SEC iXBRL filings.

Most SaaS solutions have XBRL tagging embedded in the document that the users are working on, therefore making it easy for transitioning to iXBRL. SaaS solutions also offer the flexibility to take the XBRL tagging process in-house if the company wants to or use their XBRL expert teams who do the tagging on their document.

Out of the numerous items which a company’s compliance team is responsible for, using a SaaS Solutions for compliance reporting helps companies with saving a lot of time with just a simple and streamlined process and provides a new and improved way of working.