In March 2006, a new facility opened on the Companies House website that allowed people to submit dormant company accounts electronically.
The service is based around a simple, downloadable Adobe PDF form that accepts typed input, checks the validity of the data and, subject to electronic sign-off with an authentication code, packages the information up into data strings that can be reviewed, validated and processed by the back-room computers at Companies House.
The e-accounts filing service has been extended with a form for abbreviated accounts and the full, small company accounts form should be available online by the end of 2006.
According to Jo Jones, transformation programme manager at Companies House, this next stage in the e-accounts project will enable the agency to accept around 80% of filings electronically.
Although it involves some complex internal logic and is a pioneering implementation of eXtensible Business Reporting Language, XBRL, the e-accounts project went from specification to fruition in less than a year and was implemented using Adobe LiveCycle Designer, which comes bundled with Adobe Acrobat Professional 7.0.
Based on interviews with Jo Jones and senior project manager Ros James, this article tells the story of the Companies House e-accounts project and explains the role PDF forms are playing in the initiative to let companies to file their statutory information using XBRL.
E-filing hit the headlines with the release of Lord Carter's review of HMRC's online services, but the mechanism has been on the Companies House agenda for some time. Jones explains that the process started with development work to configure the back-end systems to accept XBRL-format submissions generated by accounting software.
Once this step was achieved, Companies House set out to extend the project to those who don't use compatible software systems - in much the same way that individual taxpayers can fill out their own tax returns online using HMRC's web-hosted software.
"E-enablement isn't the end point," Jones says. "It's about designing services that businesses want to use that also deliver efficiency to us."
Ros James explains that when she joined the e-accounts project team early in 2005, her priorities were to come up with a system that was:
- cost-effective for users
- easy to use; and
- used the XBRL data standard.
The reason for choosing XBRL, James explains, is that it is an open standard that carried no licencing charges and is being developed with the support of leading accounting practices (see box).
"The advent of XBRL made it possible to set up the Companies House e-accounts project," says transformation programme manager Jo Jones. "It offered us a way to create an interface so that software developers could format final accounts in a way that we could import. But we also needed to do something with XBRL for smaller companies to file."
For a couple of years, both Companies House and HMRC have been working on variations of a UK GAAP version of XBRL that would enable them to tag accounts data with XML labels that would let their systems process incoming data. Where the full UK GAAP schema has around 3,000 elements, the Companies House format only has a few hundred. The tax authorities require more complex data sets for Corporation Tax returns, backed with computations, so work on their XBRL schema has not been completed yet.
These parallel initiatives are the bedrock on which the government wants to build a single point of contact for statutory filing. Jones points out that a consultation exercise ended in March 2006 about synchronising accounts and tax filing dates. In his review of HMRC's online services, Lord Carter suggested XBRL be mandatory for Corporation Tax returns from 2010 - if the HMRC's systems are ready. The controversy surrounding Carter's proposal to bring forward the filing deadline for personal taxpayers has overshadowed the suggestions for business e-filing, but keep an eye out for further moves in this direction.
Handling different XBRL taxonomies and getting them map to each other can be extremely complex in theoretical terms, but once the XML-based tags are agreed, it's reasonably easy to process the data. At Companies House, the mechanics of handling XBRL are either carried out within the accountant's final accounts production package, or within the e-accounts PDF form. In both cases, users don't have to understand the underlying XBRL schemas, they can continue to present the accounts they have been used to.
"The whole point of the web filing service is that it is an alternative to having to buy in software for the filers, while it gives us the XBRL output we want, which is where the efficiency comes," says Jones.
For potential users of its new e-accounts filing service, Companies House appreciated the need for an offline mechanism. Putting together a set of financial statements is not something that lends itself to sitting in front of an open browser window for extended periods.
When it came to assessing how best to handle this offline approach, the e-accounts team decided Adobe LiveCycle Designer was the best option. "Adobe Intelligent Forms were able to give customers flexibility for the statements they file - and it gave them an opportunity to build up the information in their own time," says Jones.
"Accounts are complex documents, with a variety of formats and disclosures. They aren't like changes of address or director, the forms have to cater for more variability," she explains.
The Companies Act 1985 requires presenters to file an exact facsimile of the accounts. A PDF form achieves that, and also provides a mechanism to make presenters declare under which schedule they are filing. By building logic into the Adobe form, Companies House could set up consistency checks to catch errors and so reduce the number of submissions that are rejected.
How the e-accounts system works
Currently the e-accounts service is only available for dormant company and abbreviated accounts, with the full, small company accounts form due for release by the end of the year. Once users have registered for the online filing service and received a company authentication code and security password (contact the Companies House helpline on 0870 33 33636 for further details), they can log on and see a list of submission forms, including the dormant and abbreviated accounts PDF templates.
To get working on the electronic forms, the user needs to save the file to their computer and ensure they have a copy of the latest version of Acrobat Reader, which can be downloaded for free.
The Companies Act 1985 requires accounts filings to be approved by directors, so the electronic forms include a mechanism that allows you to print a draft for approval. When you press the "submit" button on the PDF form to file the accounts on the Companies House portal, it triggers a second authentication request to confirm that the accounts are a replica of those signed by the board.
At that point, data entered on the electronic form is parcelled up into an XML data package (XDP) and deposited on the Companies House server. The output from each field on the PDF form is tagged with an XBRL label to tell the back-end computers where the information comes from. When submitted, the XBRL file goes through another round of validation checks before ending up in the master database.
"E-accounts is a business process, which sits as a component within the overall electronic filing system," explains Jones. "The path the data takes was already decided, because it follows the same paths as data from other software and web filing transactions."
How the e-accounts forms evolved
Experts at Adobe helped Companies House build the prototype forms, which were taken out to focus groups. The feedback went into revisions that went through a second round of user testing.