Digital Financial Reporting

Someone said something to me today which helped me recall something which I had thought about years ago when I had an opportunity to visit a Fortune 100 company to see how they created their financial statement.

The thing which sparked this thought again was a chiropractor who was going through the process of implementing electronic medical records.  She was telling me that her macros were not working how she wanted them to work when she did initial examinations of a patient. She said she needed to make adjustments to her macros. You may not be familiar with the SOAP (subjective, objective, assessment, plan) method of documentation employed by health care providers, and that specific process is not really relevant here.

What is relevant is this.  First, a chiropractor adjusting her macros. Who would have thought a chiropractor would ever even use macros.  Second, there is a process and that process can be converted from manual medical records to electronic medical records.  Third, that SOAP process can make use of templates.  There are thousands of diagnosis codes and procedures employed to treat medical conditions. These can be distilled down to templates.  I would contend that there is a lot of similarity between electronic medical records and financial statements. There are likewise lots of different types of financial statement disclosures which can be distilled down into templates.  (i.e. neither medical records nor financial statements are totally random)

So imagine breaking down a financial statement into its components.  Here is one instantiation of a financial statement broken down into its components.  That is created from an XBRL processor.  Then, once all the components are correct, running a macro to generate a financial statement in HTML and/or XBRL or any other format for that matter. Creating a financial is adjusting templates, running macros, and repeating this until your financial is complete.  Business rules enforce the integrity within and between components.  All that ugly XBRL stuff is hidden deep within the software, but that is what enables the macros to do their job reliably.

I can imagine pretty easily careating something like this in Excel.  Longer term, I don't see Excel as the platform for creating financial statements. I see something like GoAnimate as an example of how the application might work. The point here is to look at the process totally differently than it is being looked at today. Think model based reporting.

That is what seems to be in store for the last mile of finance, generating those financial reports. The process seems to be taking lots of little pieces and putting the pieces together. Why cut and paste when you can have a macro do the work.