Reflections from the First Annual IFRS Taxonomy Convention
I recently attended the first annual IFRS Taxonomy Convention in London—an amazing experience and wonderful opportunity to brush shoulders with some of the "who's who" of the XBRL global community. While several different issues surfaced at the convention, there is one issue I'd like to provide some perspective on…the question of what benefit XBRL can provide to a preparer**.
At WebFilings, our success has been born out of a vision and passion for revolutionizing the external reporting process—especially for preparers. While this vision is not limited to XBRL, we believe XBRL will have a significant role in further increasing the accuracy and efficiency of this process.
Why tackle this issue? The final morning keynote of the convention opened and closed with an anecdote about "selling XBRL." The story was humorous but at the same time quite sobering. Reflecting on this point, I recognized that this wasn't the sole "sales pitch" reference for XBRL, IFRS, or for its taxonomy I have heard. If XBRL has been around for over ten years and is now mandated by an increasing number of global regulators, why do we need yet another sales pitch?
I didn't have to wait long for an answer to this question. The afternoon was organized around three tracks tailored for preparers, regulators, and users & stock exchanges—each of whom are distinct stakeholders and intended beneficiaries of XBRL. I chose the preparers' track despite initially leaning toward another track. I assumed I wouldn't learn a lot in that track given that most of WebFilings work to date has been with this audience—I couldn't have been more wrong.
What I learned, first hand, was an answer to my question "Why the sales pitch?" In a nutshell, representatives from three companies (one US and two international) voiced common, highly negative experiences in preparing their financials using XBRL. I listened, cringing in my seat, as I heard them describing their challenges with both in-sourced and outsourced XBRL processes.
After hearing their experiences, I thought "Who wouldn't hate this stuff?" What they described was a tedious, disjointed, and highly technical process. And, tracking down validation issues—all of them found it virtually impossible.
The message they essentially delivered was start early, get IT involved because it has to be a joint effort, expect lots of pain, take ownership of the process, and good luck!
In fairness, not everything was negative. One of the presenters described her ideas of how XBRL could actually benefit preparers through better software. She spoke of a more integrated approach to using XBRL to apply real-time business rules and validations to the reporting document. As she moved point-by-point through her slides, I got more and more excited. This woman was describing the vision for the Wdesk Solution!
Then, in an instant, I went from the emotional high of my day to my emotional low as she concluded by saying that solutions of this type were probably at least five years away—a hopeless picture for a preparer. I now understood the need to "sell XBRL." After hearing this, I nearly pushed a fellow WebFilings colleague and attendee up on stage to give this audience a product demonstration on the spot.
From the beginning, WebFilings core philosophy and vision have centered on ease-of-use for the preparer. We set out with a goal to build an XBRL solution that financial professionals could embrace and use without the involvement of IT. Additionally, we recognized that an integrated approach to XBRL not only kept the preparer in a familiar environment (the context of their reporting document), but it also allowed users a way to keep ever-changing report data in sync.
The seamless 11th hour changes with full EDGAR and XBRL turn-around in minutes that WebFilings customers experience is a stark contrast to a "pencils down" mandate days before filing that traditional processes require.
While our current success is a testimony validating our approach, we are far from content. With each new release of our solution, we seek to innovate and find ways to make external reporting easier on the preparer. One such example in XBRL is the dreaded validation process. Efficiency and ease-of-use led us to a complete overhaul of this workflow in our most recent release. Those impossible-to-understand errors are now translated into succinct messages that provide instructions on how to correct the problem.
Not only that, we actually wire them into the reporting document so our users can navigate right to the source of the problem. At WebFilings, we are actively looking beyond the mandates in order to find additional ways of using XBRL to increase the accuracy and efficiency of SEC reporting. After all, the original goals of XBRL were centered on the integrity and efficiency of business information exchange.
We believe, like the presenter I mentioned above at the convention, that these goals have as many benefits to preparers as they do to consumers. Since WebFilings beliefs drive our innovations, you can expect that we will continue to provide substantive answers that will be seen not as "Band-Aids" to a problem, but as breakthroughs in compliance reporting.
About the Author
David Haila is a Senior Software Engineer and Lead XBRL Architect at WebFilings. David has worked for over seven years developing enterprise software. David joined the WebFilings team early on and has worked on both the design and development of the product's XBRL component.