In my previous blog I talked about four steps to help scope the XBRL process for first time filers. The second step I described is:
“Review three to four of your key financial statements in the context of the current XBRL taxonomy.”

This should help you to understand the scope of the tagging challenge. You can review the XBRL Taxonomy, by clicking here. I thought I would provide a brief video as an example of how you could review the taxonomy.

Note: This Youtube video is best viewed in Full Screen mode, at 480px. Otherwise, download the file.

As many XBRL software and service providers spread “Fear, Uncertainty and Doubt” on the perils of the XBRL process, this article serves to reduce the uncertainty with information on the best approach for XBRL first time filers.

1. Start by talking to some XBRL service providers to become more informed about available solutions to understand available solutions and approaches.   �
2. Review three to four of your key financial statements in the context of the current XBRL taxonomy. This will help you to understand the scope of the tagging challenge. To review the XBRL Taxonomy, click here.
3. Decide on the approach to filing the first time and price alternative options. There are basically three approaches to filing (1) File through your existing printer or CPA firm; (2) Purchase XBRL tagging software and bring the process in-house; (3) Use a collaborative approach that merges options 1 and 2 by using a software as a service provider.
4. Start the mapping and tagging process early with a practice run on an existing quarterly filling at least one quarter before your filing deadline.

To help with Step 3, Host Analytics is offering a free interactive mapping report for companies that are required to file for the first time in 2011.  Click here to register for the free offer.

This is the fifth blog in a series entitled “Accountants are from Mars, Operations are from Venus”.  The objective is to highlight both the problems and solutions to key issues impacting agile planning and forecasting.  In short, the key issue is many “budgeting” systems were created for cost control and were built around the chart of accounts.  When operating departments “plan” (could be weekly, monthly, etc) they think in terms of operational metrics which are not directly related to the chart of accounts.  More specifically operations understand how to plan the operations and finance knows how to budget costs and both need to better understand the other group’s perspective for a successful planning process to be created.

Some suggestions from previous blogs include:

1.         Creating a metric oriented culture

2.         Use those metrics to drive the plan

3.         Create templates to bridge the process and allow the budget preparer the flexibility to create calculations and do some remedial modeling using excel formulas

The third step mentioned above is only an interim step to quantify some of the models operations use.  The objective is to quantifying the operational planning calculations and to help the finance group understand the business operations in mathematical terms to gain a perspective on what operations is thinking.  The fourth step in this process is to convert these “ad hoc” excel formulas (models) to a defined modeling approach.  I consider a defined modeling approach:

-          A rules based approach that has a defined process and workflow

-          Supports flexible rules based calculations

-          Provides the ability to launch user configurable reports after a model is run to analyze results

What I’m describing is a modeling workbench where the budget preparer has different tools to model at both a macro and micro level.   This workbench would be used to leverage the formulas created in the “template bridge” (step 3 above) to create a robust planning environment

Unfortunately there are very few software solutions that offer a robust and defined modeling approach.  In my next blog I will provide a better description of features and examples of a robust modeling environment.