Historically speaking XBRL was born in USA. However converting all the documents from a non xbrl environment to the xbrl environment is happening all over the world. The UK, USA, etc. are choosing to do the outsourced work in India. A very big quantity of this work is happening in Navi Mumbai!
Of course it is also happening in other parts of the world and the country…
There is a huge shortage of Chartered Accountants, Cost accountants, lawyers, Company Secretaries – for doing this kind of hard labor.
Add to this is the mandate by the MCA – that 30,000 Indian companies have to file their Annual Return in xbrl format from this year onwards. In the next year the numbers are likely to go up to 900,000 companies.
Is it worthwhile for a company to do the conversion process internally by buying a tool? To me the answer is NO.
First of all it is not a critical task. Today when people are willing to outsource all activities, outsourcing xbrl conversion makes sense. In fact a lot of sense. Let us say you were to buy a tool for Rs. 300,000. You still have to employ a CA who will learn (say 2 months – so a ctc of Rs. 150,000 further)…and he will take 15 days to do tagging properly (ICAI estimates it will take about 90 hrs to tag one company). This is another Rs. 40,000.
So the total cost of doing it in house is about 500,000 + cost of training. Whereas if you outsource you should be able to get it done for say Rs. 60,000! Far, far cheaper even in the year of falling software prices.
What happens if there are say 20 companies in the group? Funnily then time constraint comes in. You will need to buy multiple copies of the software and train more people! This is because if you have say 20 companies – you cannot process them sequentially. There has to be parallel processing so that you meet the deadline of 30th September 2011.
Advice is simple: Outsource for the current year (ended March, 2011) and buy the software for the next year. However if you are a mutual fund or a bank, buy the product now, so that you can file monthly returns on the same system. This is because you are giving current and confidential data. For the MF it makes sense to buy a tool and learn how to use it – they will end up filing at least 53 reports in a year. However for the RoC filing even mutual funds should logically outsource the full activity!
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