It is now compulsory for many companies to file their Annual Returns in XBRL format. Let us look at the process involved in doing this:
One of the methods of getting it done is by giving it to a service provider, who will take the data from you, and convert it into xbrl.
You convince a company that you are capable of converting their pdf / other formats into xbrl format.
Then the company sends you the annual return. Assuming it is in non HTML format, you need to convert it to HTML format. Simultaneously you ask the company for a lot of details which are NOT to be found in the pdf format that they have sent you. This includes details like the Company secretaries’ PAN, a lot more detailing of the related party transaction, etc.
This is then loaded to a software which will help you in the tagging. Once you convert the financial accounts into HTML format, you start the tagging. Tagging is a process by which you find the appropriate tags for the P&L items and the B/S items.
Then you tag the Auditor’s Report, Director’s Report and the Notes on Accounts – these are a little easier than the accounts.
Once you do the tagging – a simple company will take about 20-30 hours of effort, at the least.
Once the tagging is over, and the document is converted into XBRL format, it can be sent to the client.
However, the client will not be able to read it, so a human readable format has to be created for the same. This could take the form of pdf or excel.
The CA may come up with some regrouping of the same – and the re grouping will have to be done. This statement has to be then certified by a Cost Accountant, Chartered accountant or a Company secretary.
My estimate of the time frame is as follows:
Getting the pdf, converting to Html, etc: 0.5 day
Setting up, building, tagging : 20 hrs (3 days)
Sending, co-ordinating with the CA, etc 1.o day
Totaling about 5 days – let us say 2 days of a CA earning Rs. 75k a month (CTC) + 3 days of a graduate (earning Rs. 15k a month)
WITHOUT COSTING the price paid for the software, it is Rs. 6000 + 1500 = 7500 + overheads .
Now if you are doing this as a business, you realise that there will be some additional costs like courier, etc. WHICH WILL definitely happen. Also there will be some marketing and selling expenses for doing ANY business. So logically no sensible company which wants to make money can afford to price these services at any thing less than Rs. 15-30,000 for a reasonably sized company…
However there are companies who are ringing up saying ‘we can do it for Rs. 1500 PER COMPANY…I keep wondering how and why…
What is the credibility of such an offer ( is this an offer at all?)…The questions to ask are:
1. How can you do any work at all for Rs. 1500
2. Can you explain the whole process of converting?
3. Can you give me the CV / cell number of the people doing the work?
4. If you wake up on 25th November and tell me it is not passing through the validator, what should I do?
5. Have you converted any document for anybody in any country and passed it through a validator?
6. I am in Mumbai, you are in Delhi how do I trust that you will not just run away with my money? L O L.
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