Outsourcing XBRL Services to External Vendor: Yes or No?
eXtensible Business Reporting Language or XBRL is an XML-based computer software language that enables preparers to tag the financial outputs in their business reports to the elements within the ACRA taxonomy. Using XBRL in financial reporting helps investors analyse the company’s performance more efficiently and compare the results across industries.
Why Do Companies Outsource XBRL Services to External Vendors?
Preparing and filing annual financial statements with ACRA can be a tedious and time-consuming process for the companies in Singapore. It may even deviate their focus from the core activities while preparing XBRL reports. Many companies find outsourcing XBRL filing requirements the best approach. At the same time, some other businesses still seem to think that outsourcing their XBRL services to an external vendor is risky and lacks security.
To answer the question if you could outsource your XBRL service to an external vendor or not: Yes! Apart from the obvious advantage of reducing your efforts, outsourcing offers several other advantages.
Companies continue to see structured data and XBRL filing as a compliance burden. While outsourcing XBRL is an ever-going debate, several companies, including SMEs and large MNCs, have started to opt for trusted vendors to prepare their AFS. Let’s dive in and look at some of the advantages and disadvantages of outsourcing XBRL services to help you decide if it is the right choice for you.
Advantages of Outsourcing XBRL Filing
- Focus on Core Activities
This is an essential benefit of outsourcing XBRL requirements. Adding the task of preparing compliance reports for the in-house team will only increase the burden and shift your focus from the core activities of your business. Outsourcing is the most cost-effective way in such a situation.
- Reduced Labour Costs
Hiring and training new employees about XBRL tagging can be quite expensive. However, outsourcing XBRL requirements save a large proportion of your money or labour and overhead expenses.
- Access to a Team of XBRL Experts
XBRL external vendors have a pool of trained XBRL experts who ensure maximum compliance with the ACRA requirements. Moreover, the need for hiring professionals who are well-versed with MBRS filing is eliminated.
- Elimination of Technology and Software Costs
Having an in-house team for XBRL filing requires a robust software solution and an expert who can run it effectively. However, outsourcing your XBRL reporting services can help you save additional funds on infrastructure and software costs. Instead, you can invest these funds in the expansion of your business.
Disadvantages of Outsourcing XBRL Filing
Outsourcing XBRL services requires handing over the business function to a third party. You may experience some problems while outsourcing, which include:-
- Confidentiality and security
- Management difficulties
- Lack of flexibility
- Instability of the outsourcing company
The Road Ahead
Despite the disadvantages, several companies, including SMEs and MNCs, prefer outsourcing their XBRL services due to its various advantages. In fact, with a trusted XBRL vendor like DataTracks, disadvantages are a thing of the past! The expert team of XBRL professionals at DataTracks have experience of 17+ years in filing compliance reports for Singapore countries with ACRA. The company has a track record of 220,000+ compliance reports for over 21,500 clients.
So if you are looking to transfer your compliance burden to an external vendor, DataTracks is your ideal choice. Contact an XBRL expert @+65-31-582-850 or email at firstname.lastname@example.org TODAY!