By its very nature, a typical reporting process can be time-consuming. A report like the 10-K has over 20 disclosures and 5 statements to be filed with precision. During the year, the fateful report changes multiple hands and globally oscillates between departments and teams who review it and provide inputs and comments before it reaches a final stage. Adding to this, updates would need to concurrently flow through HTML and XBRL before finally filing with the SEC.
To simplify the report preparation to the XBRL reporting standard, the US market has seen a trend where more companies are moving to disclosure management solutions to streamline their compliance reporting process. We dive deep into what parameters go into opting for compliance software and why.
1. A CLOUD-BASED, COLLABORATIVE, SINGLE-SOURCE PLATFORM
What is your current compliance filing process like?
If it includes a lot of back and forth-ing of updates, versions, emails, and documents across different teams checking, re-checking, and triple-checking if there are no mismatches between the XBRL and the HTML output, you need definitely to consider better ways to manage your existing process.
Having a cloud-based platform solves many of these problems. Any number of members can work on the document with changes and comments reflected in real-time. There is just one document in place which is the ‘single source of truth that guarantees visibility and control.
Single source software solves the complication of both the HTML and XBRL documents being out of sync with each other. It generates both documents from a single source file, leaving no room for error. It is advised to invest in compliance software that offers a cloud-based, collaborative and single-source platform.
It is advised to invest in compliance software that offers a cloud-based, collaborative and single-source platform.
2. IXBRL READY PRODUCT
The Securities and Exchange Commission (SEC) announced on June 13, 2016, that it will allow companies to voluntarily file structured financial data in Inline XBRL (iXBRL). This will replace the dual formats of XBRL and EDGAR HTML and will henceforth be the single format that companies will need to file with, come 2020.
For companies using a single-source disclosure management system that is already inline XBRL compliant, these functionalities will be taken care of. Get a head start in your move to iXBRL with IRIS CARBON® and generate your report literally at the click of a button.
3. SPREAD SHEET AND LINKING FEATURE
Working in Excel demands numbers to be keyed in. Not only is this time-consuming but highly erroneous too. A simple example could be totaling errors that can be present in a financial report when a number reported does not add up correctly.
Established disclosure management providers like IRIS CARBON® offer a spreadsheet utility in the platform where numbers in the spreadsheet can directly be linked to the document. Update a number and the totals get automatically calculated, and so do all the reference points to which such numbers are linked.
Eg: The Cash value appears in the Balance Sheet and Statement of Cash Flows. By updating the Cash amount in the Balance Sheet, the Cash Flow gets automatically updated.
Imagine the time saving if your entire MD&A numbers get automatically updated including the increase/decrease information that is reported in absolute numbers and percentages.
4. REVIEW AND COMMENTING
So, your team has updated the required data in the report. How would you facilitate auditors to access, comment, and suggest changes? Features like Editing, Review, and comments in compliance software fast-track the finalization process with approvals and sign-offs all in one seamless platform. While looking to purchase compliance software, this feature is a must-have.
With the theme of ‘self-filing solutions’ being the mantra of the day, product companies try to combine the idea of a ‘do it yourself’ model along with assisting when needed. Most compliance product companies today offer a Full Service, Support As You Need It, or a DIY option to choose from. While choosing compliance software, it is a good idea to make sure your vendor provides these options to choose from.
6. DOCUMENT ARCHIVE
Numerous documents need to be referred to while preparing compliance reports. You may need legal agreements, and loan documents while working on several sections of your compliance reports. A platform that provides a centralized repository to store and archive your reference documents would save you a lot of time.
7. SEC UPDATES AND MARKET NEEDS
Apart from many other updates, the SEC brings out a new version of the US-GAAP taxonomy every year. The SEC always allows only the latest and the previous year’s version of the taxonomy to be used. It also recommends that companies upgrade to the latest version of the taxonomy. While migrating to a new taxonomy, it will be good to check if the product is a part of the overall annual compliance package or being charged additionally. IRIS CARBON® provides you a one-time, flat price irrespective of the number of SEC, market, or taxonomy updates.
IRIS CARBON® provides you a one-time, flat price irrespective of the number of SEC, market or taxonomy updates.
8. ROLL FORWARD FEATURE
Creating a financial report each quarter is no easy task- especially when you have two documents- HTML and XBRL; both to be submitted on the very same day. Ensure your compliance software includes a roll-forward feature where dates can be automatically rolled forward to the next reporting period along with updating dates both in the document and in XBRL too. You can also check if setting up successive period reports is part of the overall product offering- if yes, you’re getting a very good deal and a great value proposition!
9. BEYOND THE KS AND QS
In addition to preparing quarterly and annual financial statements, make sure your compliance software addresses the need to create, manage and file a wide variety of form types such as press releases, proxy statements, etc that need to be filed with the SEC.
10. PRODUCT SUPPORT AND CUSTOMER SERVICE
The need for having a good team of product support and customer service can be of utmost importance when buying compliance software. It is imperative before signing up with any product vendor you check if the product support and customer service come as a part of the overall offering or if it needs to be paid additionally.