ESEF Delay in Your Country? Now’s the Time to Get Ahead
Many countries in the European Union have been given an extra year before they will require mandatory filing in the European Single Electronic Format (ESEF). Now that the question of timing has been answered, you might be asking yourself: how can I best use this additional time to my advantage?
For some, it may be a great relief to hear that your country has postponed the ESEF for a year. However, you are only time rich if you actually do something useful with that time. That’s why last-minute shoppers will always be stressed if they don’t learn from their last-minute shopping experiences! (Can you tell I’m writing this following the holiday break?)
As a follow-up to our previous blog on ESEF uncertainty, here are six steps to making the most of the extra time you may now have.
1. Evaluate your choice for ESEF reporting
If you have made a plan already for your ESEF requirement, did you make the right choice? Maybe you were forced to accept a workaround for your initial ESEF filing, or settle on a short-term fix. Use these 365 days to go over a solution that will really make a difference in your organisation.
2. Test your ESEF reporting process
Why not use this extension to do a dry run of producing your annual report according to the ESEF requirement? A potential postponement gives you the opportunity to test your new process without the pressure of real deadlines or the risk of failure.
3. Learn how you can avoid version control nightmares
Annual reporting is a large beast of a document fed by many contributors. A stressful point for many corporate reporting teams is versioning. Can you say that you know with absolute confidence that everyone is working on the right document? Maybe take time to look at the software developments in annual reporting which can streamline and centralise the entire process, rather than adding the XHTML and iXBRL® patch at the end. Take the time to focus on a complete solution, rather than just trying to solve one added issue.
4. Build in the data assurance you need
If you had the time to really think about your process, do you really honestly trust it? For example, do you have the confidence to add the actual revenue figure in your strategic section, or do you worry that the figure in your balance sheet won’t be updated in the narrative? With new technology for ESEF reporting, data can be linked from one source file to multiple destinations—meaning you never have to sort through dozens or hundreds of locations to see if they all match. You now have time to see how connected data works.
5. Ensure the quality of your XHTML
Another consideration which may have slipped by is the quality of the XHTML your company will deliver to your regulator and investor. Not all XHTML is the same. Conversion from PDF to XHTML is not a straightforward task and could lead to layout or file size issues. Check with your supplier. Ask to see a full report sample. Does the output reflect the values of your company? And, just as important, is the standard of the output what your investors expect?
6. Take time to think beyond compliance and regulation
Imagine how digital reporting with clickable data points would affect your investor relations. The short answer here is incredibly! By providing an interactive experience for the user, your investor relations team will be able to harvest intelligence not accessible with a traditional PDF. For example, something as simple as using an XBRL viewer for your ESEF report—and publishing that data voluntarily for investors—can enhance the experience for the user whilst creating more data harvesting intelligence for you. These online viewers demand compliant XHTML, so make sure your output conforms to best practice.
The ESEF delay doesn’t mean you should sit idle
To recap, the clock continues to tick even with the ESEF deadline extended. Use this gift of an extra year to your advantage, so you can find a long-term ESEF solution that benefits your company and your investors. You now have time to make the best choice for your teams. Seek advice, balance your options and select the best solution.
If you would like to see how you can simplify ESEF reporting so you can be well-prepared when the mandate takes effect, schedule a demo of the Workiva platform now. There is no time like the present!
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