The ICAEW’s Paul Booth outlines some of the products available and how to choose the one most appropriate for your business.
There are so many ways of producing iXBRL files and more software solutions are being announced all the time, but how can you tell which is best for your business/practice? Instead of listing the available products/services by category, as HMRC’s ‘recognised’ list does, I’ll start from the other end, with a few categories of user – who you are, what you do, what software you use already – and suggest the likely approaches you might take, with a few comments.
For now, I won’t discuss the tax aspects of CT filing. It is the final accounts aspect that is causing more worry – not least because, with few notable exceptions, software suppliers have not yet released their iXBRL products. Indeed, some that are already listed by HMRC are not yet available to the public. Most are being released during the last quarter of this year.
It is impossible to encompass all the permutations of likely preparers and filers in one short article, but here are a few of the most common.
For one single, simple business (or possibly an accountant in practice) acting for a very small handful of clients
Look at HMRC’s free product. If it’s just once a year for one simple company, you may not mind spending an hour or so with HMRC’s limited and ‘clunky’ product. After all, it’s free, and it enables you to produce all three bits of the CT return (CT600, computations, accounts). However, if you have several filings to do or fall outside the ‘smaller companies … with less complex tax affairs’ definition, look elsewhere.
For a practice with many filings to do that is already using accounts production software
The obvious, straightforward option will be to stick with your AP supplier and take their new iXBRL-enabled version, but do make sure your supplier is producing an iXBRL upgrade (a few are not), will have it ready in time, and that it will cope with your particular accounts. If your sets of accounts fall within your AP software’s standard templates it could be as simple as clicking the new ‘iXBRL’ button, instead of ‘print’ or ‘PDF’; but for ‘non-standard’ accounts there may be a little extra work to do at the end of your accounts production process.
For a business or practice with several filings, not currently using AP software
There are two options here: Either acquire an iXBRL-enabled AP product, or stick to your existing process (e.g. preparing accounts in Excel and/or Word) but add an extra task, converting a Word document into an iXBRL file with the help of ‘conversion’ or ‘tagging’ software. The first of these options should be more efficient and less time consuming in the long term but more painful in the short term. Getting to grips with (and getting others trained on) a new product and processes can be non-trivial. The second of these options is being viewed by many as a good stop-gap at least, but look carefully at the contract terms - rumour has it some such suppliers want to lock you in for three years.
Another relevant option for this group is to outsource the iXBRL production altogether. Several providers are offering to take your existing non-XBRL format accounts (e.g. Word), and send you back iXBRL files. Here you are paying a third party to take the problem, but you would still need to reassure yourself that they are doing a competent job. Again this may be, for many, a stop-gap for the first year.
For a business or practice doing both bookkeeping and accounts production
At least a couple of suppliers are developing solutions that integrate the whole process, from bookkeeping (or ERP), through accounts production, to an iXBRL file. This is ambitious, and not to be undertaken lightly; but if it works it could reap the greatest rewards in terms of improved efficiency.
The ICAEW’s forthcoming Implementing XBRL roadshow will put more flesh on these bare bones. These three hour events include live demonstrations of several of the approaches alluded to above.
Paul Booth is technical and development manager of the ICAEW’s IT Faculty.
Need some help implementing your iXBRL strategy? Anita Monteith, the ICAEW's tax faculty technical manager, will be hosting a free webcast on AccountingWEB look at how to devise the ‘perfect’ iXBRL implementation plan and migration strategy. Click here to register.