Why Should CFO Opt for iXBRL Software?

During the Covid-19 pandemic, companies across South Africa have increased their reliance on technology. From remote working to tools like automation and analytics, all CFOs and auditors ensure productivity by building confidence in the quality data available for decision-making. While assessing your organization’s digital priorities, one digital area that can benefit your accounting and reporting needs is adopting the iXBRL reporting standard. CFOs need to understand iXBRL’s working, benefits, and challenges like any other digital technology.

Inline eXtensible Business Reporting Language or iXBRL, is a digital reporting standard that allows a single document to deliver both human-readable and machine-readable data. Investment in iXBRL software can lead to cost reduction & growth and enable automated handling of a company’s financial data. Besides these, there are other benefits of opting for iXBRL software. Diving deeper…

Benefits of iXBRL Software for a Business

Reduction in Time, Cost, and Effort

Many companies may look at iXBRL as another compliance burden. However, in practicality, it is more of an opportunity than a burden. The generation of automated reports can streamline the entire regulatory filing process, which can otherwise be an extremely labor and cost-intensive task. The manual generation of XBRL instant documents is nearly impossible. This is why CFOs need to opt for iXBRL software.

Tax-Based iXBRL Software

Most of the iXBRL software available in the market today is tax-based. What is tax-based software, you ask? Tax-based iXBRL software is regularly updated with new tax regulations and policies, enabling companies to implement changes in filing and preparing AFS and annual returns.

However, CFOs of many South African companies believe that financial executives view iXBRL as just an added step for regulatory requirements or compliance. Reason? The benefits of iXBRL have not been communicated well to businesses. In addition, it generally requires investing in software to consume data, resulting in companies trying to avoid its use.

How can CFOs Tackle the Lack of iXBRL Awareness?

By training and educating the staff in accounting, finance, and investor relations, CFOs intensify their role in offering quantitative information and insights related to the company’s financial data. Moreover, they also need to be trained about the iXBRL tagging of reports. Why? Because the efforts of preparing AFS can go in vain if the stakeholders come across tagging errors in those reports.

Challenges CFOs Will Face with iXBRL Implementation

Initial Setup and Integration:

Training: Ensuring that financial teams are adequately trained to use the new software and understand iXBRL tagging and reporting requirements.

Data Accuracy and Quality:

Consistency: Maintaining consistency in data tagging across different financial statements and reporting periods.
Validation: Ensuring that all financial data is correctly validated to meet regulatory standards, which can be challenging with complex and large datasets.

Regulatory Compliance:

Evolving Standards: Keeping up with constantly changing regulatory requirements and ensuring that the iXBRL software is updated accordingly.
Cross-Border Compliance: Navigating different iXBRL filing requirements for multinational corporations operating in multiple jurisdictions.

Technology and Security:

Cybersecurity: Protecting sensitive financial data from cyber threats and ensuring the software meets all security standards.
Reliability: Ensuring the iXBRL software is reliable and has minimal downtime, which is critical during reporting periods.

Change Management:

Resistance to Change: Overcoming resistance from staff who are accustomed to traditional financial reporting methods.
Cultural Shift: Promoting a culture that embraces new technologies and methodologies within the financial department.

Resource Allocation:

Time and Personnel: Allocating sufficient time and personnel to manage the transition to iXBRL reporting, which can divert resources from other critical financial operations.
Ongoing Maintenance: Ensuring continuous maintenance and updates of the iXBRL system to address any issues and incorporate new regulatory requirements.

Vendor Selection and Management:

Choosing the Right Vendor: Selecting a reliable and experienced iXBRL software provider that meets the company’s specific needs.
Vendor Support: Ensuring that the vendor provides adequate support and training for the financial team.

Data Management:

Data Migration: Migrating existing financial data into the iXBRL format without losing data integrity.
Data Volume: Managing large volumes of data efficiently, especially for large enterprises with complex financial structures.

Stakeholder Communication:

Internal Communication: Effectively communicating the benefits and requirements of iXBRL implementation to internal stakeholders.
External Reporting: Ensuring that external stakeholders, such as investors and regulatory bodies, understand and accept the new reporting format.

How DataTracks Rainbow is the Ideal Solution for Your iXBRL Needs

Roll Forward iXBRL Software Feature

DataTracks Rainbow’s roll forward feature significantly enhances the efficiency of iXBRL tagging by allowing users to carry over iXBRL tags from previous periods. This capability can reduce the time spent preparing iXBRL reports by up to ten times compared to starting from scratch. Audit firms and group companies can create multiple templates for iXBRL tagging, which can be reused across various filing companies. This not only streamlines the report preparation process but also ensures consistency in report generation.

XBRL Validator

Our in-built validation engine includes a preventive validation mechanism that filters out 95% of errors during the tagging process. Before generating the iXBRL document, it undergoes the CIPC validation gateway, which provides a list of errors (if any) before submission, thereby avoiding the possibility of rejections. This feature ensures that your financial reports are accurate and compliant with regulatory standards.

XBRL Tool Collaboration

DataTracks Rainbow allows you to split documents into multiple sections to enable collaboration and co-authoring. This feature grants section-specific access to users, maintaining confidentiality until the document is ready for submission. This collaborative approach enhances productivity and ensures that all team members can contribute effectively.

XBRL Data Cloning

With DataTracks Rainbow, you can link facts present in different places within the software. Changes made at one location will automatically update the facts in all other locations in the document, adjusted for scale and decimals. This feature ensures data consistency and reduces the likelihood of errors.

XBRL Multiple Input

Populate data from various MS Office software such as Word, Excel, and PowerPoint. Our proprietary linking feature lets you associate and link data from offline Excel spreadsheets. This flexibility allows you to integrate data from multiple sources seamlessly, enhancing the efficiency of your reporting process.

XBRL Restriction

DataTracks Rainbow allows you to define user privileges for better authorization management. Our comprehensive Audit Trail feature helps track any user’s activities within the software with detailed granularity. This feature enhances security and accountability within your organization.

XBRL Formatting

Our iXBRL Tagging Software retains the format as in the original Word document. Users can make any necessary changes using various formatting options provided in our Editor. This feature ensures that your reports maintain a professional appearance and are easy to read.

iXBRL – Driving Efficiency

As the use of the digital reporting system – iXBRL continues to grow by the regulatory bodies, companies that have opted for iXBRL software can reap benefits from preparing and filing high-quality reports. Moreover, it also helps them provide valuable information to stakeholders and capital markets, accelerating the decision-making process. However, if you want a streamlined filing experience without needing in-house training, partnering with a trusted iXBRL service vendor can be your ideal choice.

Enter DataTracks…

DataTracks, with the expertise of more than 16 years and 200,000 compliance reports, ensure quality and reliability in your financial reporting with CIPC. Speak to an iXBRL expert at +27-10-446-9061 or email @enquiry@datatracks.co.za and make your way towards 100% error-free reports.