How to Improve Efficiency and Reduce iXBRL Compliance Cost by 70%?
As of 1st July 2018, when the CIPC mandated the use of iXBRL for annual financial reporting from qualifying entities, the main concern has been about the costs and complexities related to the new filing system. The main objective behind this was to automate the data collection and minimize errors, which will ultimately reduce the operating costs of using iXBRL. iXBRL will eliminate the need to make multiple submissions to different regulators, thereby improving the efficiency of businesses.
Implementation of iXBRL
Every corporate entity will take a different route to incorporate the new iXBRL interface with their back-end systems. They have the option to create their iXBRL documents through an auditor, in-house or engage a third-party software service provider to convert their financial statements into iXBRL format.
Accounting /Audit firms can assist entities with the conversion, but they may charge a hefty amount of fees, which can be a huge burden for businesses.
The biggest challenge in doing this in-house requires a well-experienced team with complete knowledge about iXBRL, CIPC taxonomy and the tagging process. Staying updated with new CIPC mandates and streamlining the data from different sources can be time-consuming. With this approach, the company has to do most of the heavy lifting.
The third option is to outsource to a CIPC authorized software service provider (SSP) and let a partner do the iXBRL conversion for you. A reputable company like DataTracks can make it quite easy for you without wasting your time and effort.
Most Cost-Effective Method
Once you have done the due diligence of the service provider and ensured that an accurate and timely report will be delivered to you, you can rest at ease without worrying about non-compliance and the risks associated with it.
Outsourcing to a reputable service provider frees you of the additional work involved and the mental stress that comes with it. It can also reduce your costs by up to 70% because your money is directed towards investments with better ROIs than in training your staff on iXBRL or purchasing new software to convert to iXBRL format. With their vast experience and competence, a good service provider can lower your overall costs and demand less involvement from your team.
Reduce Costs by Improving Efficiency
Do not look at compliance as a sunk cost because it can help you avoid risks and effects of non-compliance.
Embed structured reporting right at the source to achieve higher speed and frequency in preparing and analysing the financial information.
If you divide the costs between two components – tangible and intangible, the intangible costs such as productivity and efficiency of the report easily outweigh the tangible costs of conversion. This results in higher transparency for regulators, investors and other stakeholders.
The costs associated with iXBRL vary and depend on company size, the number of filings per year, industry involvement, etc. But they can all be reduced substantially with the help of a competitive software service provider like DataTracks. If you are ready to get your iXBRL conversion done by DataTracks, get in touch with us today at firstname.lastname@example.org.