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Looking Beyond Regulatory Reporting

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The advent of XBRL has undoubtedly introduced an exciting era in the world of Business Reporting. The ultimate goal of XBRL is to enable speedy and efficient access to information, improve corporate communication with stakeholders and most importantly reduce enterprise risk by accurate consolidation and analysis of data. However, as it stands today XBRL is mostly limited to regulatory reporting.  This is understandable, because most technology tools were developed as a response to regulatory diktats.
While most companies in the initial XBRL adoption phase have looked it from a purely tactical perspective, they should gradually plan to broaden the scope of their XBRL initiative by making the under-lying source systems XBRL aware. By doing this, companies can generate different types of reports and dashboards and enable interaction among disparate applications and systems.  Using XBRL as an enterprise wide strategic tool will eliminate manual collation of data, stream-line processes, remove manual errors and automate validations.
ERP systems to some extent enjoy an advantage of housing the source data, and thereby making it easier to drive automated XBRL reporting from source systems. While it sounds like the solution to the strategic direction companies should take, it is not so straightforward. According to a research conducted by the Aberdeen Group (March 2012), adoption rates of ERP financial management solutions are going down rather than going up (32% in 2012 compared to 44% in 2011). As per the report, this indicates a general trend where more companies, particularly in the finance space, are now seeking niche solutions over a general ERP solution to achieve greater level of details/capabilities.
What this indicates is that there continues to be an urgent need for niche solutions that can completely leverage the power of XBRL not just for regulatory reporting, but take it to the next stage for consolidation, analytics, custom reporting etc. The array of technology products in the market today belong to either of two extreme spectrums. At one end are high-quality desktop solutions for XBRL conversion. While they do a commendable job of conversion, they do just that and nothing more. On the other end are ERP financial management systems that are too broad based (and expensive), and are not geared to provide to the specialised requirements that a niche solution can provide.
New perspectives have to emerge to leverage the power of XBRL. The BeyondWalls BRC Suite from Beyond Square is an attempt to bridge that gap. How it does it is the subject of another blog.

Karthik Ganeshan (karthik.ganeshan@beyondsquare.com)
Director, Beyond Square Solutions
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