Sage’s inability to deliver its planned iXBRL solutions in time for the HMRC deadline of the 1st April 2011 was widely criticised by certain segments of the accounting press last week. Competitors too have been quick to lambast the company, but although Sage may not have covered itself in glory FSN believes that the implications may not be quite as severe as has been claimed.
The drama started with press reports last week that Sage had confirmed that its accounts production programs will not be ready before the 1 April deadline when firms will have to start electronic filing of iXBRL year end accounts with their Corporation Tax returns. The affected products were thought to be Sage Accounts Production (SAP) and Sage Accounts Production Advanced (SAPA).
But Sage told FSN that its customers will be able to produce iXBRL compliant filings using Sage XBRL Tagging (powered by ONESOURCE), a conversion product that allows accounts/trial balances exported in MS Word files to be tagged with UK GAAP compliant XBRL.
Jayne Archbold, Managing Director, Sage Accountants Division told FSN, “The software will enable accountants to follow the same processes they do today, preparing accounts using Sage Accounts Production software, before passing the result through Sage XBRL Tagging (powered by ONESOURCE).”
Although this is less technically elegant than iXBRL capability embedded directly in Sage Instant Accounts Production, Sage Accounts Production and Sage Accounts Production Advanced it remains a valid solution to the iXBRL requirement pending the release of Sage’s complete solution.
But Phil Robinson, Managing Director, IRIS Accountancy Practice Solutions a close competitor of Sage was very critical of the solution. Talking to FSN, Robinson said, “It is technically inelegant for sure but also extremely inefficient. The Word files carry no ‘knowledge’ of XBRL in the way that an accounts production system would and there is a lot of manual work involved in assigning the correct tags to account lines.” Robinson doubted the suggestion that functionality in ONESOURCE designed to identify close matches would marry up around 80 percent of account lines with the correct tags. “I reckon the automatic matches will be a lot less than that,” he said.
Robinson also denied that IRIS’s offer “to rescue customers left stranded by Sage’s failure to meet HMRC April 1st mandation date for iXBRL, urging them to call the IRIS iXBRL Emergency Help Line” was alarmist.
“Sage has had at least two years to get this right and has let down its customers who were expecting an integrated package rather than a conversion tool”.
But IRIS’s claim that this leaves Sage’s customers, both accountancy practices and corporates, “in danger of penalties from HMRC for late filing of returns” appears overstated. Whilst the ONESOURCE approach may be technically less elegant it still provides a workable solution and secondly, companies have many months in which to file their accounts and CT600’s after the year end. The 1st April merely marks the point at which the legislation becomes effective rather than a critical filing date itself.
But despite Sage’s assurance that the fully updated product range will be released later this year IRIS’ Robinson remained critical. “The problem is Sage customers don’t know whether that means they will get the product in, a couple of months, 6 months or 9 months,” he told FSN.
