Johannesburg, 24 Aug 2017
The compliance burden on businesses of all sizes, across all industries and around the world is ever-increasing. It's a fact that businesses can spend more time and money on trying to be compliant than they do on their core business. The administration alone that accompanies every daunting regulatory requirement can seem overwhelming. All too often the requirements are complex and onerous and can get in the way of the business...well...doing business.
"A sound approaching to easing the compliance burden on companies is to automate the process wherever possible," advises Mandy Leonard, Business Development Director at EOH Intellient, "and choose a partner who can provide the necessary insights to stay informed of new developments, regulations and time frames."
While the above advice is generally relevant when it comes to regulatory compliance, for the purposes of this article, Leonard is referring to the programme undertaken by the Companies and Intellectual Property Commission (CIPC) to establish XBRL (eXtensible Business Reporting Language) as the digital financial reporting standard for qualifying entities in South Africa as of 1 July 2018. She explains: "The aim of CIPC's implementation of XBRL is not only to improve efficiency, effectiveness and the quality of financial reporting to CIPC; but also to pave the way for other regulators in South Africa to adopt XBRL, and so allow for improved information exchange among regulators and stakeholders."
XBRL is the computer language for the electronic communication of internal and external business report information. It is cross-platform, technology agnostic and Internet friendly, and improves data accuracy by reducing manual efforts and subjectivity.
XBRL is applicable to all types of business information including financial, non-financial, rules, formulas, summarised and detailed data. The open standard is based on XML, which is primarily used to encode documents and other arbitrary data structures for exchange over the Internet. Instead of treating financial information as a block of text - as in a standard Internet page or a printed document, XBRL provides an identifying tag for each individual item of data which is computer readable.
Many countries have promoted the adoption of XBRL as a universal electronic financial reporting mechanism, and South Africa is following suit, steered by CIPC.
Leonard welcomes the initiative, saying: "We've been working closely with key role players in South Africa to make sure that we can assist customers who need to meet this legislated reporting requirement. The main aim for business is to reduce the time, cost and risk associated with compliance."
Leonard says: "What's needed is a solution that can automate the XBRL tagging process, helping the finance department improve the timeliness and quality of financial management processes and reporting. Traditional methods are manual and time-consuming, errors are frequently made in combining data with narrative (who, when, why), especially when data is re-entered into reports. In addition, companies often lack the ability to analyse the data. Businesses need to adopt a solution that will facilitate audits, extend enterprise resource planning transactional controls, and improve financial risk management."
Leonard advises businesses wishing to simplify their compliance process to adopt a secure, collaborative, process-driven approach for defining, authoring, reviewing and publishing financial and management report packages.
Business benefits of automating XBRL compliance:
* Combine data and narrative to obtain actionable insight;
* Data access and data integration provide a single version of the truth on a single reporting platform;
* Obtain the most accurate picture possible through collaboration;
* Shrink the time it takes to define, produce and deliver reports;
* Ensure your most important and confidential data is visible only to authorised users;
* Accurate numbers; and
* Ability to deliver faster, more accurate insights to all stakeholders, anytime, anywhere.
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