Improving Financial Analysis and Reporting Using XBRL and the Microsoft Office System

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  Situation
  Solution
  Benefits
  Case Studies

Situation

The process of financial reporting and analysis can represent a huge cost for many companies. For example, the preparation of quarterly statements for publicly traded companies consumes the majority of a finance department’s resources during the reporting period. Likewise, it is not uncommon for equity analysts to spend up to one-third of their time entering data into spreadsheet models and verifying that data for accuracy.

The primary challenge with producing reports and analysis is that the data needed to produce these items is locked in documents, and the data relies on those documents to give it context. For example, a number in an annual report requires contextual information—company name, time period, or revenue—to give the number meaning. To use data locked in a document or spreadsheet, it must be manually entered, copied, and may need to be recalculated.

The following challenges underscore the need for a solution that helps automate the way data is captured, shared, reported, and analyzed:

Solution

XBRL is a worldwide standard for the publishing, exchange, and analysis of financial reports and data. XBRL makes it easier to prepare and publish financial documents. You can enter information once, and then automatically convert it to various formats. The information can also be reliably extracted and analyzed across companies with no manual intervention.

Microsoft Word and Microsoft Excel have long been used to help compile, report, and consume financial information. Many finance organizations primarily use Microsoft Excel to produce reports. A Microsoft Office-based XBRL solution enables companies to take advantage of all of the benefits of XBRL, while at the same time working within a familiar environment that requires little or no training.

A Microsoft Office System-based XBRL solution can help to solve financial reporting and analysis challenges. A solution could include the ability to:

Author XBRL:

•	With XBRL, data can be automatically pulled into documents and spreadsheets, reducing or eliminating the need for manual reentry and easing the data collection process. This saves time and increases the accuracy of the data.
•	Because XBRL is an international standard based in XML, XBRL-compliant data is automatically normalized so that when it is inserted in to a document or spreadsheet, the data is automatically in the correct format and units.
•	Construct and publish quarterly (10-Q) and annual (10-K) earnings reports in XBRL, making them available to analysts who want to use XBRL in their analysis processes.
•	Produce a template with XBRL tags in place, that can be distributed to others within the company as a Word or Excel file. This masks any technical complexities of XBRL, letting users construct reports in a familiar environment, and enabling the company to tap into the benefits of XBRL.

Analyze Data:

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Managers can analyze data using traditional tools like Excel and compare data from different geographic and business entities using a standard reporting structure. Managers can instantly compare their results with those of other divisions or organizations without risking the errors that can result from data re-entry. Additionally, analysts can easily pick and choose which data elements they view and use these for comparison.

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An XBRL solution could automatically import data into Excel 2003 analysis models, removing the need for data re-entry and reducing the potential for errors. For example, equity analysts use sophisticated Excel models with numerous worksheets. These models are driven by published market, company, or industry data. With XBRL, this information can be pulled directly into the exact place in the models where it is needed.

Share Data:

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Using familiar tools such as Microsoft Office System applications, businesses can generate XBRL documents that are then available to users with different systems and tools. Today in the United States, finance professionals from many Fortune 500 companies publish their quarterly (10-Q) and annual (10-K) earnings reports in XBRL.

Ensure Data Accuracy:
The XBRL standard includes a robust conformance suite that enables solution providers to make sure that valid XBRL is submitted and produced. Validation should be a part of any XBRL solution so that the output is reliable. For example:

•	Finance executives can see at a glance how their numbers line up with local compliance requirements. Publishing numbers in an open standard to shareholders enables industry leaders worldwide to maintain financial transparency. As new requirements are dictated, they are seamlessly integrated into the reporting process without deployment of new systems and tools to comply with those requirements.
•	Regulators can validate that data submitted in XBRL format is compliant with the XBRL standard, and then easily normalize that data against regulatory controls.
•	Auditors might use this information to set up a continuous audit environment in which data reported is automatically validated against internal controls.

Benefits

The benefits of a Microsoft Office System-based XBRL solution include:

Case Studies

See how other companies are using the Microsoft Office System for their XBRL solutions.

If you have a solution based on the Microsoft Office System, learn more about opportunities to showcase your solution with Microsoft.