Software firms prepare for fight over filing

Software companies are drawing battle lines against accountants over who
should provide lucrative services to help firms deal with new filing
regulations.

All financial statements and corporate tax filings through the taxman and
Companies House must be done in a new technology format from 1 April 2011.

With the deadline looming, accountancy firms and software houses are
competing to help businesses prepare their accounting systems to meet the new
requirements. Companies’ financial data will need to be “tagged” using iXBRL
technology under the new rules.

With each piece of data tagged, it is easier to compare financial information
from different companies.

The data is then converted to enable users to view the tags attached to the
financial information.

Accountants could be more expensive for clients to use to help convert
financial data into iXBRL, compared to buying software to automate the process,
said Graham Tilbury, senior tax technology adviser at financial software company
Digita.

“For the larger consulting practices this is their opportunity to get more
consulting revenue,” he said.

However, Jon Rowden, PricewaterhouseCoopers XBRL assurance leader, said that
providing iXBRL technology was a “particular challenge for the software
provider”.

He added that a lot of work would need to go into preparing tax compliance
software to be iXBRL ready.

Dennis Keeling, a business software analyst and BASDA founder, said: “They
can compete but why would they want to?”

Keeling conceded that the biggest disappointment surrounding iXBRL was that
software vendors had not provided “a single interface with Excel”.

Sage estimates that there are approximately 5,500 tags under UK GAAP, and
12,000 under IFRS.