The advancement of eXtensive Business Reporting Language (“XBRL”) technology along with the three-wave SEC mandate for submitting financial information as interactive data has created a tsunami for external reporting professionals at public mpanies.  The first year interactive data SEC filing requirement has been mmonly referred to as block tagging. This means that in addition to tagging the body of the financial statements the individual footnotes are each block tagged with an appropriate element from the mpany’s chosen XBRL taxonomy. The send year interactive data SEC filing requirement includes all the first year requirements, but then requires the additional three-levels of detail tagging for the financial statement footnotes.

The two primary resources needed to meet the interactive data SEC filing mandate are training (people) and technology (software).  The typical options for obtaining the necessary resources to beme mpliant with the SEC mandate generally range from mpletely outsourcing the XBRL filing requirements to bringing the XBRL tagging process in house.  Your choice should be based on your mpany’s particular circumstances.  The following discussion will identify the pros and ns of three options; (1) outsource mpletely, (2) bringing XBRL mpliance in house, or (3) some mbination of both.

Option 1: Outsourcing

If you decide to mpletely outsource your SEC filing requirement you still need to understand the specifics of the SEC mandate relative to your mpany.  The mpliance responsibility ultimately is still yours so the reliability of the interactive data service provider is crucial when choosing your XBRL service provider.  This option avoids the sts of XBRL technology training and the extra infrastructure that is required to run the software, including ongoing maintenance fees associated with both the hardware and software.  The degree of XBRL expertise necessary to meet a filing requirement once every quarter may be a re mpetency that can be more efficiently outsourced.

Pros: avoids XBRL-related IT and training sts

ns: you are not in ntrol of your filing and your internal staff does not have the knowledge to verify the auracy of the filing (which you are still responsible for)

Option 2: In House

Buying the technology and training your internal resources to meet the interactive data SEC filing requirements provides you with mplete ntrol of the final work product.  There is benefit to knowing the details behind the numbers in the external financial reports while selecting particular taxonomy elements for the financial statement line items.  The initial sts may be higher than mpletely outsourcing. However, over time the ongoing expense may be lower with a suessful initial implementation of XBRL technology and training.  On the other hand, if you experience personnel turnover in your external reporting group, your training sts uld remain higher over time.

Pros: you are in mplete ntrol of your filing 

ns: you incur significant initial sts for IT setup and personnel training with no guarantee of suess or auracy

Option 3: Outsource / In House mbination

When you choose to outsource the technology while bringing the XBRL expertise fully or partially in house, you are generally choosing the best of both worlds. The decision to choose this option should be based on your mpany’s desired level of ntrol, turnover expected in the external reporting role, and the st versus benefit of having in house XBRL expertise as opposed to outsourcing your XBRL needs. But remember, you can outsource your XBRL tagging, but you can’t outsource mpliance. It is a good idea to have someone internally that knows enough about XBRL to verify the auracy of your filings. The software as a service (“SaaS”) business model has been in use for over 10 years and is ntinuing to gain traction in the marketplace as an efficient, secure and reliable technology option. By relinquishing certain ntrols over the systems when you choose a SAS 70 Type II SaaS model, you are freeing yourself from the burden of ensuring the security of the data.

Pros: you maintain ntrol over your filing, your overhead is less than it would be if you chose a full outsource or in house solution, you receive training and support from a dedicated team of CPAs who are XBRL experts

ns: perceived lack of ntrol over the data

At Rivet Software we overme this perceived lack of ntrol by offering a customer empowerment business model that allows you to be as involved as you want to be in the tagging process. You can choose to have your staff fully trained by our experts from the beginning or you can opt to have our team handle your tagging for you. Our most mmon professional services delivery option has been to provide full service for the first year (4 quarters) block tagging filing requirements, then training the client to perform the quarterly block tagging instance filing thereafter. Then we provide full service during the send year (4 quarters) detailed tagging filing requirement, then train the client to perform the full block and detailed tagging for each ensuing quarterly instance filing thereafter. We also offer a test filing to all of our customers before they submit their filing. Our XBRL professional services team is mprised of CPAs with industry specific knowledge. Our flexible training and tagging options are mplemented by our secure SAS70 Type II managed hosted facility. The SaaS technology delivery model promises easier, speedier and less expensive implementations.

The value proposition of Rivet’s mbined outsource / in house solution is hard to ignore.