Experts in iXBRL

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In April last year, HMRC mandated that all corporation tax returns including Accounts and Computations for accounting periods ending after 31 March 2010, must be submitted online in iXBRL format. For many companies this meant that they had to convert their Accounts into iXBRL for the first time last year.

Outsourced iXBRL conversions proved very popular in 2011 as companies chose their auditors or other fully managed iXBRL service providers to convert Accounts on their behalf. This option was mainly driven by the uncertainty surrounding the requirement but some companies opted for their auditors as a “safe” solution to the requirement regardless of the (often) high charges imposed.

Nearly a year on since the first mandatory iXBRL submission to HMRC, it appears that companies are now more comfortable around the subject. In line with the prediction from the Big 4, at Arkk Solutions we have seen an increase in the number of companies enquiring about our iXBRL tagging software as companies look to bring the work in-house and regain control.

SOLUTIONS FOR BRINGING IXBRL IN-HOUSE

HMRC’s Free Software

HMRC’s free iXBRL software allows companies with very basic disclosures to easily convert their Accounts into iXBRL. However it does have limitations and most Corporate Accounts will not fit into the template.

If your accounting disclosures are basic then you shouldn’t have had to outsource your iXBRL conversion last year, but if you fall into the category of companies that outsourced because they found HMRC’s template difficult to use, then you may want to consider having another go this year. Try submitting your Accounts early outside the busy December and March peak periods for a smooth first time in-house conversion.

Accounts Production Software

Most accounts production software solutions now come with iXBRL as standard and in many cases they also offer fully automated conversion of Accounts into iXBRL. If you currently prepare your Accounts in Word or Excel but have been considering moving to accounts production software, then you could make the move now to save on iXBRL conversion costs.

There are likely to be changes to your current work processes so make sure you consider all necessary factors like your long term strategy, cost, resources and support before taking the plunge.

iXBRL Tagging Software

Investing in a stand-alone iXBRL tagging software means you can continue to prepare your Accounts in Word or Excel with little or no changes to how your Accounts are currently prepared. There are mainly three types of iXBRL software available:

1)     Cloud software – the software is based in the cloud which means you don’t have to download anything to your computer. You visit the vendor’s website or online portal, upload your Word or Excel Accounts and embed the necessary tags online. The main advantage of using cloud based software is the flexibility to start using the solution straight away, however as the software is based online; the tagging experience is largely dependent on the quality and availability of your internet connection.

2)     Desktop software – unlike cloud software, you will be required to install the software onto your computer, however this means you will be able to access the system whenever you need it as it is available offline.

3)   Word or Excel Software – this is where your tagging takes place inside Word or Excel so the tagging software is actually part of your Microsoft office document. This offers fantastic conversion of Accounts into iXBRL as the layout and format of the original document stays intact. Arkk Solutions was the first company to launch iXBRL tagging software that works in this manner.

Reuse The Auditor’s Tagging Work

At Arkk Solutions, we recently launched a new bolt-on to our iXBRL Adapter that allows companies to import iXBRL documents prepared by their iXBRL provider last year (including The Big 4 auditors), directly into Word. This helps companies get the most from their 2011 investment while preserving their iXBRL tags with a simple one click rollover button. To find out more about how to use this service, please email us at enquiries@arkksolutions.com or join us at our breakfast briefing, details below.

Outsourced your iXBRL Last Year? Bring it back in-house while preserving and reusing your tags from last year!

Join us at our breakfast briefing to learn pragmatic solutions for bringing iXBRL in-house in 2012.

Why attend?

1)     1) Discover how to easily reuse the tags prepared by your provider last year, including the Big 4

2)     2) Get expert iXBRL tips from our senior iXBRL consultant - Nick Baldwin

3)     3) Learn how to significantly reduce your iXBRL tagging costs

 To register and to find out more, please click here

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The surprise hit in this Christmas' annual toy war was the Doggie Doo: for those without children, a plastic sausage dog that delivers coils of plasticine from its tail end to the delight of girls and boys alike.

Defecating dachshunds were low on the wish-lists of our iXBRL customers this Christmas. For many this was the first time they would submit returns under iXBRL, and what they wanted was their December year-ends done and dusted in time to sing Auld Lang Syne. For the vast majority their wish came true, but for an unlucky few the lump of coal in their stocking came as a rejected HMRC submission. So what steps can be taken to ensure you do not find yourself on the HMRC's naughty list in future?

1) Submit as early as possible. It may be wearing thin but this remains the best advice for those submitting in iXBRL for the first time. The Arkk support team was kept busy over the festive period and the most common complaint was unavailability of support from submission-software providers and tax advisers. IXBRL is still new technology and unexpected issues do arise, so if you have a March year end and you see chocolate bunnies in the shops, it may be time to think about submitting.

2) Test submit. If you are unlikely to be ready to submit until the last minute, most submission software and tax agents can provide a test-submission service, essentially a dry run for your actual submission. This should identify any issues early on. Beware of testing accounts, comps or return documents in isolation as this will only tell you that one part of the submission is sound, not the whole envelope. It is also worth noting that 'validation' is not the same as test submission. Some submission packages provide false-negatives - 'errors' that will not cause your submissions to fail - which are often best ignored.

3) Register for online submission. If you fail to register for corporation tax online with HMRC, you cannot submit in iXBRL, and if you leave it until the last minute you will most likely miss your submission deadline. It can take about a week to receive your login details in the post so make sure you sign up in good time.

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1. My accounts are industry-specific and do not fit the standard format

If you operate in the banking, mining or charity sectors, the good news is you have your own XBRL taxonomies of accounting terms designed to accommodate your non-standard accounts. If you operate in other industries like insurance, you may find fitting your accounts to the standard UK GAAP and UK IFRS is akin to a square peg and round hole. The key is to do the best you can with the concepts available.

2. I need to submit accounts to HMRC that are not prepared under UK GAAP or IFRS

With the exception of US GAAP, HMRC is not currently accepting taxonomies for other territories so it may not be possible to convert your accounts into iXBRL for submission. It may be necessary to submit in PDF, but liaise with HMRC as soon as possible to confirm this will be acceptable.

3. Not all my disclosures can be XBRL tagged

This is not unusual. In fact it is highly unlikely every disclosure will be taggable because you are limited by the taxonomy in use. If you choose to split Accruals and Deferred Income in your UK GAAP accounts, for instance, you may find you cannot tag both lines. The key is to tag as much as possible with the accounting concepts available.

4. But if not all my numbers are in iXBRL my accounts won't balance

Not a problem in itself as iXBRL is not a casting exercise. If you find you cannot tag every line in your P&L, your submission will not be rejected out of hand, and so long as you have tagged as much as possible, the HMRC should have no cause for complaint.

5. I have spotted mistakes in my accounts. Will this cause my submission to fail?

The short answer is no, unless your XBRL data contains inconsistencies. For instance, if you tag your profit before tax for current year as both £50m and £51m, chances are your submission will fail. There are workarounds, but the best solution is to fix these kinds of mistakes prior to conversion.

6. My provider has given me an HTML file for submission when I need iXBRL

No need for concern. Confusingly, accounts and tax comps submitted in iXBRL are not '.ixbrl' files but '.html', familiar to most as web pages.

7. My HTML looks different from my original accounts / tax comp

Again, no need for concern, so long as the user can still read your report and understand your disclosures. An HTML is governed by different rules to Word, Excel and PDF documents. A web page eschews page breaks, for instance, preferring instead a 'scroll-down' format, so your table of contents might look rather redundant. The key is to remember that these reports are for HMRC and not the AGM, so focus not on how pretty they are, but how practical they are.

8. I am submitting myself and my submission was rejected by HMRC

The vast majority of failed self-submissions are caused by basic discrepancies between the return and supporting documents. If your submission fails, your first step should be to check your CoHo numbers, UTRs and reporting periods all tie up. If your submission still fails, your next step is to contact your iXBRL solution provider. Given that this is their business, any dedicated supplier should have qualified accountants and technical expertise on hand to see you through to successful submission.

9. My accountant says my iXBRL accounts / tax comps have failed submission

Assuming your accountant has not made any basic errors, it may be necessary to contact your iXBRL solution provider with details of the errors received. Very few errors cannot be rectified within a matter of minutes, so if your accountant or supplier tries to tell you it will take days or weeks, it might be worth asking why.

10. Do my dormant entity accounts need to be in iXBRL?

The first principle of iXBRL is the reports you submit to HMRC have not changed, only the formats have changed. If HMRC required you to submit dormant accounts last year, the chances are they will be required this year too - in iXBRL.

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Last year, many companies submitted their Accounts and Computations for the first time in the new iXBRL format required by HMRC, and as you'll imagine, this meant it was a very busy year for us.

It was great working with some of the leading companies in the UK like F&C Investments, Skipton Building Society and Paul Smith, to mention a few. Our iXBRL conversion software proved very popular and our managed tagging team successfully converted over 1000 Accounts and Computations into iXBRL.

This year, we will be carrying on the pace from last year. We will be launching a new iXBRL solution aimed at making it easier for companies to convert their Accounts into iXBRL. Our team are now even more experienced in iXBRL tagging and we are looking forward to applying that experience accordingly.

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Are you in the insurance industry? Join us at ICAEW's 'Financial and Regulatory Reporting for Insurers' event on Wednesday 9th, November where we will be discussing the impact of iXBRL in the insurance industry.

Our discussion will cover topical issues such as:

- Explanation of what iXBRL is;

- Timeliness in its introduction (tax, accounts filing, Solvency II);

- Choices in tagging languages;

- Practical issues for insurers in getting ready to use more iXBRL

To find out more about the event, please click here.

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We are very pleased to announce the launch of our new iXBRL Viewer!

Using Microsoft's Silverlight technology, the iXBRL Viewer runs in your browser, enabling you to print and display the tags embedded in your document. We never store or copy any document added to the viewer so your information stays confidential.

To find out more about the iXBRL Viewer, please click here.

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1. Make the most of the soft-landing period 

This doesn't mean do as little as possible for the first two years; it means make the most of the HMRC's grace period to prepare for when things get serious in year 3.

2. Submit early 

The chance to get in before the 31 March deadline has now passed, but early submission still has its benefits. Most outsourcing providers will charge a premium for conversions at peak times, and tech support teams are likely to be stretched in weeks leading up to common year ends.

3. Match your solution to your resources 

If you have a finance team of accountants in house, it makes sense to make the most of this valuable resource with some tagging software. If however you don't have that luxury, outsourcing will probably be your best option.

4. Don't buy the book unless you know how to cook!

In other words, iXBRL software is not much use unless you know you can use it. Firstly, it is important to recognise that the conversion of statutory accounts requires somebody that knows accounts. This is not a job for the teenager on work experience. And secondly, don't view the offer of training as naked upselling. It will ensure you get the most out of your investment, and should be retained within your business for years to come.

5. Don't expect software to answer all your prayers 

There is no shortage of software packages on the market - some excellent, some not. But regardless of which you opt for it is important to appreciate that iXBRL is a relatively new phenomenon. Accounts production software has been around for years, and yet those of you who use it will appreciate that no package comes without its annoying idiosyncrasies. You won't find it in the marketing material, but all iXBRL software has its shortcomings. I can get away with saying this because Arkk's happens to be probably the most robust on the market, but there is no perfect package out there. The trick is to try before you buy and not take any slick demos at face value.

6. Price isn't everything

When choosing an iXBRL provider, basing the decision on cost alone can quickly prove a false economy. Before signing any cheques always be clear what support is included in the price and ensure your provider has the in-house expertise to deal with issues should they arise.

7. Invest in Year 1

The introduction of iXBRL has been a headache for most businesses this year. The last thing you want is to go through the whole ordeal all over again 12 months later. Set yourself up with a viable solution for at least the next three years and you'll sleep much better in 2012.

8. Expect savings in Year 2

Some providers will try to convince you that the first year price should remain the same in years two and three. In the vast majority of cases this is simply not the case. Regardless of your solution, there should be significant cost savings.

9. Look beyond your auditor

When new technology is forced upon us, it is natural that some will settle for the reassuring familiarity of a name they know. But there's a reason not everyone buys their internet from BT any more. Other providers will often offer more flexible, more reliable and more competitively-priced solutions - so don't commit until you've seen what the market has to offer.

10. Don't delay!

It would be nice to say don't panic, but the fact is time is running out if you haven't yet secured your iXBRL solution and you have a popular year end. Finance teams need time to adopt new software packages; the best outsourced conversion providers are already booking up their December and March year end submission slots, and prices are only expected to go one way as deadlines approach.

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I have been reading with interest about the cost reduction and cost cutting role of the Finance Director. It is no surprise that companies are tightening their belts in the current economic climate; even the HMRC has the challenge of achieving a whopping £1.6bn reduction in costs by 2015 while improving service quality! This can offer some explanations to its recent adoption of iXBRL, which not only allows the HMRC to make significant savings in its processing costs but also allows it to improve its risk assessment quality.

One of the articles that really caught my attention was the cost boomerang piece on financialdirector.co.uk. I find it interesting that a lot of CFOs and Finance Directors believe that only 5% of cost savings made during the recession can be sustained in the long term. Obviously as the economy picks up and people regain their confidence to spend, the company automatically sees an increase in cost as it invests more in staff and resources to cater for the rise in demand. However, I believe there are some cost savings yet to be made, possibly even within the accounts department itself.

Take iXBRL for example, at Arkk Solutions we have been contacted by many FTSE250 companies whose first point of call for their iXBRL conversion needs were accountancy firms and software providers they have used in the past. Unsurprisingly, over 95% of these companies went on to choose us over these providers once they realised we could offer them the same level of service (and in some cases, even better service) at on average 50% cheaper.

Why are we able to do this? Well, we specialise in one thing – iXBRL conversions, and our expertise means we’re not spread thinly and can get things done faster. This in turn results in significant cost savings which gets passed on to our customers. Whilst we’re not the cheapest iXBRL provider out there, our prices are very competitive for the high quality of service we offer as standard.

I wonder if a whole range of cost savings can be made across the business by simply switching providers where the only difference is price. There are many niche businesses out there who like Arkk Solutions are very good at what they do and can offer better service at a more "reasonable” price tag. To me, this makes perfect sense and it seems our customers think so too.

So what do you think? How has your company made cost savings during the recession? Do you think these savings can be maintained in the long term? I'll like to hear from you, please leave your comments below.

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