Digitisation success as companies embrace CIPC digital reporting technology
For the past year, the industry has been readying itself for the CIPC’s 1 July 2018 deadline regarding its new electronic reporting solution, XBRL. This will see the start of a cut over to Inline XBRL filing for private and public companies. A technology standard, XBRL enables the implementation of digital financial reporting for companies that submit financial statements to the CIPC. Synergy, a Certent partner and analytics and data specialist in South Africa, has completed several implementations and says that XBRL is about more than just a regulatory process, it will ultimately provide significant advantage for clients, while also holding immense promise as a big data tool.
Sunet Leimecke, Synergy Solutions Manager, says that the XBRL implementations are giving clients future analytical power and will assist both the company and the regulatory bodies to better govern: “XBRL is proving itself as a vital tool to all involved and while it is a massive undertaking, it will ultimately present clients with far-reaching strategic, financial and technology benefits. The role of a specialist partner is critical, but a partnership-based approach is recommended. Clients need to understand the importance of their involvement in their financial numbers and not rely on external companies to interpret their numbers and mapping to the CIPC taxonomy.”
Leimecke says that financial departments must be confident in the numbers submitted to the CIPC, as once submitted, they remain in the system. She cautions that clients may not consider the full process: “Clients need to consider their entire process from preparing their Audited Financial Statements as well as auditor's sign-off. This is something that has been grossly underestimated in our experience.”
Synergy managed the MMI Holdings XBRL implementation and according to Pieter Fourie, Financial Manager: Statutory Reporting, it is a move in the right direction. “We were one of 100 companies included in the pilot phase and it was a good learning experience and an important step forward in terms of compliance. It would not have been possible to complete an XBRL implementation without the guidance of a company like Synergy. Technical assistance and guidance is a non-negotiable requirement for the entire process. Companies simply don’t have the skills in-house required to manage this technical process.”
Fourie says that Synergy also has a close relationship with the CIPC, which is immensely helpful as well as an excellent relationship and working knowledge of Certent’s regulatory and narrative performance reporting solution, CDM. “Synergy was able to raise our issues and concerns with the relevant parties and resolve them within the implementation timeframe. This ability really assisted in MMI Holdings meeting the deadline and going live with XBRL.”
He sees great value in a standard reporting approach, particularly for Group companies: “By using a standard technology approach across a Group is a significant advantage. If a Group migrates to one technology platform, it will also improve the overall process tremendously.”
Miguel Teixeira, Group Financial Manager, Invicta Holdings Limited, says that Synergy’s experience with Certent CDM was key to their appointment to manage the company’s implementation of XBRL: “They have significant experience and a good understanding of how to navigate around Certent CDM, which gave us the confidence needed to appoint them to assist us with the XBRL project. We worked together, utilising Synergy for much needed support with tagging and understanding the taxonomy.”
According to Teixeira, the requirement for a specialist partner that understands the financial statements and technology, and how to marry the two should not be underestimated: “Using Synergy greatly assisted Invicta to successfully complete the implementation. We were able to tag correctly, while also raise issues and concerns with the CIPC thanks to the relationship Synergy has with the regulator.”
Digitisation is undoubtedly the way forward according to Teixeira and he hopes that Government departments will consider creating an integrated offering: “It would be a massive step forward if we submitted one set of financials and these were used across several Government departments, avoiding duplication and resubmitting of financials in different formats.”
As a listed Group, Teixeira also sees the value of moving Group accounts onto the same system and utilising XBRL across all companies: “Synergy assisted us to get the work done the correct way, which means that what exists now is correct, and is an excellent platform to work off moving forward. It is a very technical procedure and is not something a company can do without specialist technology and financial assistance.”
Leimecke says that XBRL is necessary as the number of gaps in financial reporting standards exposed continue to increase: “We have had some significant companies under the spotlight and the need for a best-practice approach technology standard could not be greater.”
She says that of significance too is that Certent CDM has achieved an international XBRL certification. Assuring clients that the use of this technology platform will greatly assist in a successful XBRL implementation.
Ready to learn more about XBRL solutions from Synergy and Certent? Contact the Synergy team today.