According to the 2013 survey "SEC Reporting and the Impact of XBRL" prepared by the Financial Executives Research Foundation (FERF), the percentage of large accelerated filers (respondents with public float of $700 million or more) preparing XBRL filings in-house increased from 26 percent in 2012 to 45 percent in 2013.
Looking ahead, 54 percent of the large-filer respondents plan to prepare their own filings.
"For large companies, the overall trend is to outsource everything that's not a core competency, but for XBRL, we're seeing more in-sourcing," said Bill Sinnett, senior director research for FERF on a webcast discussing the survey results. "Senior financial executives and accountants want more control over their processes and data, and preparing their own XBRL filings seems to be the trend."
Speed and Flexibility
Among the chief advantages driving the growing use of do-it-yourself XBRL filing tools is the increased speed and flexibility available to companies.
Tom Gorzkowski, senior director of financial reporting at MasterCard Worldwide, said his company began XBRL filings in 2009 by using an outsourced service provider. Over time, the company brought the filing process in-house with the help of a web-based disclosure management solution (DMS).
"The software allows us to do the process ourselves versus outsourcing it," Gorzkowski said.
Using XBRL has allowed MasterCard to provide more disclosures within tables that are easier to prepare than they would be in narrative form, helping to speed the overall closing process.
Gorzkowski said the company began examining in-house approaches to XBRL filing as the word processing and spreadsheet files supporting the company's disclosures became too large to exchange easily with an outside service provider.
In addition, any needed changes would require lead time -- a delay known as "pencils down" -- that could be challenging to find within the company's quarter- or year-end closing process.
"If an audit committee member wanted to change a disclosure, it was difficult to explain why that would take a couple of days," Gorzkowski said.
Common Challenges
As more companies explore bringing XBRL filings in-house, a number of challenges remain. One of the first is the technical nature of XBRL itself, and the need to identify and tag required information effectively to meet SEC requirements.
To address those questions, Gorzkowski recommended taking advantage of a range of XBRL resources provided by software providers, the SEC, FASB, industry groups and peer networking. He also suggested reviewing disclosures from other large filers to see how they approach similar situations.
"You have to do what works for you and your management," Gorzkowski said. "We're doing it ourselves, but we have help available if we need it."
Another common question for many large filers is the cost/benefit ratio of their XBRL filings, and related questions about whether key stakeholders such as analysts or institutional investors are using the XBRL data.
Susan Yount, director of reporting practices at Wdesk, said although direct XBRL adoption remains low with the analyst community, most analysts subscribe to data aggregation providers that rely on extracted XBRL data.
As with most technical systems, information security remains a key consideration for companies considering the most effective approach to XBRL filing.
Gorzkowski said along with evaluating a company's technical capabilities to prepare XBRL filings, financial executives have to collaborate with IT leadership to determine whether the company is comfortable with a cloud solution, or whether they would prefer to host the data and software themselves.
He said the technical teams at his company and its DMS provider worked together to address security concerns, and to make the appropriate policy changes internally.
But despite those concerns, the increased control over the XBRL filing process and the related data, and the greater flexibility to make changes as a company's financial reports are prepared, means a growing number of large companies are likely to continue to bring the XBRL process in-house.