Extensible business reporting language (XBRL) becomes a requirement for financial disclosure in 2011 in the U.S. and much of the world. In the process, many expect XBRL to bring about convergence of U.S. GAAP and IFRS. Additionally, some hope that it will finally get the CFO enthused about technology tools. “Finance is the last frontier of automation,” observed Jaideep Shah, Senior Product Manager, Fujitsu, and David Taylor, VP, Strategy & Global Business Development, Trintech, during a recent XBRL tools webinar

“Finance creates a critical product for the company,” noted Shah and Taylor. But unlike other departments, which have ERP, CRM, supply chain management, CAD systems, procurement systems, and such, finance operates “without the benefit of a production platform and/or automated system of record.” Unless, maybe, you consider the GL the automated system of record.

Gartner picks up on finance’s technology shortcoming in a recent report. “XBRL can provide more capability that can improve external and internal financial reporting and transparency; however, firms are still in the process of learning.” Shah and Taylor identified a number of areas where XBRL tools can deliver greater finance automation benefits beyond just XBRL tagging.

“XBRL has unique features not found in other standards initiatives that can be used to better manage risk. Financial services firms should take advantage of the increasing viability of XBRL for risk management functions requiring information accessibility, validation, analysis, and communication,” reports Gartner analyst Mary Knox, in a recent report titled “XBRL: A Tool for More-Effective Risk Management.”

The need for automated finance tools can be seen, noted Shah and Taylor, in an ad hoc survey they conducted during the webinar. In response to the number of days to close and post financials, 40 percent of respondents said 4-6 days. Another 24 percent said over 13 days, while 16 percent said 7-9 days. Anything outside of 5 days has the potential to be a problem. Only 8 percent of the respondents closed in 1-3 days.

Technology tools certainly can help speed the time to posting results for management, but they also increase visibility into the entire financial closing and reporting process. At a minimum, according to Shah and Taylor, technology can assist with workflow management, task management and scheduling, information collaboration, and interactive document preparation, as well as embedded XBRL tagging.

For example, workflow removes time delays in determining the next step and moving work to the next appropriate level of review. At the same time, it creates a system of record for the approval process, ensuring an audit trail of appropriate reviews. It also highlights process bottlenecks in the workflow, creates transparency for global approval chains, and keeps work flowing across time zones.

Similarly, task and schedule management ensures that the correct people receive their tasks at the correct time and maintains procedures and links with the most recent policies and procedures. It also minimizes vacation and turnover turmoil by allowing bulk reassignment. Finally, it removes people, namely the CFO, from the demeaning job of nagging the process along. That alone should make it worth it.

A good resource on XBRL tools is XBRL International. ###