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Sage challenges government to support open standards for practice software

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29th Jul 2008
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Plugging practice applications togetherAs part of a campaign to boost interoperability between government websites and tax and practice systems, Sage has urged the government to make a commitment to open software standards. John Stokdyk investigates.

In a white paper called 'Open Standards within the Accountants' community' Sage UK innovation manager Kris Nayak argues that while accountants stand to benefit from data portability, the government exerts significant control over data standards through e-filing regulations and formats for statutory data such as company accounts and tax returns.

But the government's e-filing standards do not conform to Sage's view of open standards because they are designed primarily to save money and make revenue collection easier for official bodies. The needs of accountancy practitioners and the software companies that serve them are not adequately covered. Sage has built the Companies House XBRL-based data structure into its statutory filing practice solution, "but this standard is still being developed and by the very nature of a government agency owning this, it is not truly an open standard", it argues.

To improve the prospects for better data sharing within the profession, the Sage white paper calls on government agencies to recognise that their decisions have a direct impact on accountants and to take a more rounded approach to data standards. It also calls for better collaboration, consultation and education about the implications of data exchange standards from government departments.

In the case of Corporation Tax, the way that accounts to support computations are filed has taken up a lot of time in recent months. "HMRC has been engaging with the industry in order to find a way to implement XBRL, rather than sharing and working through what the problem/challenge is and exploring how best it can be addressed," note executives at Sage's Accountants Division.

When filing Corporation Tax returns electronically - which will become mandatory in 2011 - accountants need to be able to verify that what is filed online is correct. Many of the discussions have centred on a style sheet system that will accurately interpret and display accounts created using the XML-based business reporting language, XBRL.

"The Corporation Tax e-filing piece is a significant piece of work and so, a notable cost to the industry which should result in significant savings to be accrued by HMRC with little benefit being derived for the accountants’ community and most importantly of all, their clients," observes Sage.

"Consequently, further value proposition work needs to be undertaken and the 'balance of benefit' more equally distributed."

The Sage Accountants Division produced the paper to stimulate discussion within the accounting and software industries. "The open standards piece is about how we collectively, yet efficiently, engineer structured data exchange mechanisms to deliver operational efficiency gains along with cost savings to our customers," it says.

Author Kris Nayak admits that many readers might find it difficult to see the relevance of data standards to their day-to-day work, but these decisions feed directly through to the software they use.

"If products can co-operate, this saves time, manages risk and has a direct correlation to chargeable hours, topics that are very relevant in the competitive landscape faced by accountants," writes Nayak.

Open software standards and interoperable accountancy software would bring several benefits including greater freedom of choice for users and protection against the dominance of a single supplier. If the industry works collaboratively on some of its common problems, the result will be better products for users and lower development costs because of the shared effort.

Dave Forbes, managing director of Forbes Software is quoted in the Sage paper. There is a simple test to see if a supplier is committed to open software, he says: "Can you truly get at the data? For example does the software vendor give instructions to extract all client names and addresses?"

Summarising Sage's stance, Nayak writes: "Accountants analyse a large amount of data from various sources using multiple tools. They want to spend their time solving complex business problems for their clients, be that legislative compliance or business advice.

"Solving the problem of how data moves between software packages does not necessarily add value to their client. It is not unreasonable therefore, that accountants expect software to already solve this problem. Accountants are entitled to a holistic view of their client, agnostic of tools that are used."

Sage says it has worked with Digita, MYOB, CCH, PTP, Forbes, Key Time and Drummohr to integrate Sage Accounts Production Advanced with their tax software. But expanding one-to-one transfer mechanisms across all its products to all the other available practice programs would be an incredibly costly process.

As a result, Sage Accountants Division managing director Greg Ford and his team have campaigned for open standards, both through its cross-industry work with the trade association BASDA and through regular meetings and working parties with government agencies.

While critical of the government at this point, the company is maintaining a constructive stance. "Sage is highly committed to HM Government’s e-agenda and to the pursuit of getting it right first time, every time, in the best interests of all its stakeholders," it says.

Copies of the Sage open standards whitepaper can be obtained on request from the Sage Accountants Division.

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