Importance of XBRL Financial Reporting & Analysis in Malaysia
“Every second of every day, our senses register way too much data than we can possibly process in our brains.” – Peter Diamandis, Chairman/CEO, X-Prize Foundation.
Similarly, organizations produce a massive amount of financial data every day that needs to be reported and analyzed. This calls for a flexible and robust solution that can not just ensure accurate financial reporting but also high-authority analysis.
In its efforts to streamline the reporting and analysis of this financial data, SSM, the Malaysian regulatory authority, is on the verge of mandating XBRL, a powerful and flexible version of XML explicitly designed to meet the changing requirements of business and financial information.
Let’s look at,
The importance and benefits of XBRL reporting language in Malaysia.
XBRL – The Gateway to Real-Time Analysis
Roughly 1.7 megabytes of new information is expected to be generated per second for humans on this planet in the next two years.
Source: https://www.datapine.com/blog/financial-graphs-and-charts-examples/
Businesses striving to keep up with their financial affairs need a more proactive and agile solution that can produce, analyze, and deliver financial data that increases efficiency, mitigates risks, and not sets them back.
This is where XBRL comes in handy. It can provide a wide range of information about an item in your financial statement, whether asset, liability or expenditure. XBRL labels and tags the data in a standard language that both machines and humans can understand. In fact, this information also includes accounting references and shows how items are related to one another, thus representing the complete financial picture.
XBRL Also Improves the Ability to Manage Debt
The rich and powerful structure of this reporting language allows efficient handling and management of business data by computer softwares. It supports all the standard tasks, including compiling, storing, and using business data.
And when such information is converted into XBRL by leveraging a suitable software or solution, it can be used to track and analyze the ratio between your current assets and liabilities, as well as financial processes related to generating revenue and paying your dues. This helps in:-
- Maintaining short-term liquidity
- Planning long-term debt management
- Adjusting workflows and process
- Ensuring the highest return when paying debts
And Better Cash Flow Management is, Of Course, an Added Advantage
- 82% of small and medium businesses fail due to cash flow problems.
Source: https://www.score.org/blog/1-reason-small-businesses-fail-and-how-avoid-it
- What’s more, a recent study by the International Labor Organization (ILO) revealed that, amid Covid-19, cash flow management was the number one threat to business operations and solvency.
Source: https://www.ilo.org/wcmsp5/groups/public/—ed_dialogue/—act_emp/documents/publication/wcms_760306.pdf
XBRL can help your organization overcome the challenges of cash flow management. Here’s how.
The data in the XBRL reports can be easily analyzed to anticipate profit and liabilities, keep your monetary movements secure, remain fluent in the process of registering cash inflow and outflow. And once the cash flow of your organization is in order, it allows your management team to scale their operations and increase revenue streams.
A Robust XBRL Solution is What You Need
DataTracks is offering a market-ready XBRL solution that helps you overcome the challenges of converting financial statements in the XBRL format. By leveraging the technical expertise and global experience of over 16 years, DataTracks is catering to the XBRL needs of Malaysian entities. And with the soon-to-be-mandated initiative of SSM, companies are highly recommended to transition to this financial reporting format.
So what are you waiting for? Get in touch with DataTracks expert TODAY @ +60-392-126-125 or email at enquiry@datatracks.my and make your transition to hassle-free financial reporting and analysis.