XBRL is a Bright Spot in a Very Challenging Job Market

With the SEC mandating change, the financial reporting system in the United States is poised for a major overhaul. The full-scale implementation of XBRL, a web-based reporting system, will sweep public companies, creating work for accounting, finance, IT and other professionals. In today’s economic climate XBRL could be one of the job market’s bright spots.

Are you a financial, accounting or IT professional looking for the next big thing? If so, it’s time to get on board with XBRL. Short for eXtensible Business Reporting Language, XBRL is a web-based reporting system that tags critical financial information so it can be easily collected, analyzed and updated. Think of it as a bar code system for data.

The Securities and Exchange Commission has mandated that companies of all sizes adopt XBRL over the next several years. It’s already in use internationally and among the largest U.S. businesses. Surprisingly for such a sweeping development, XBRL remains relatively unknown. Expertise is limited and people who can lead the changeover will be very much in demand.

Call for Transparency Leads to Uniform System
XBRL, a version of XML (Extensible Markup Language), has been under development for some time but has gained new urgency with the ongoing financial scandals and the current economic downturn. In addition to benefits such as efficiency and long-term cost-effectiveness, XBRL provides much greater transparency. It’s far easier to access and analyze information and detect fraud and other irregularities.

So what does this mean for finance, accounting and IT professionals? First, XBRL is another example of where the job market is headed. There’s a continuing need for well-rounded professionals who understand the nexus of finance, IT, operations and regulatory requirements.

New In-House and Consulting Opportunities
New opportunities are popping up in a variety of places, from the Big Four accounting firms offering consulting, to in-house finance departments. There has been a trend of recruiters specifically seeking people with XBRL experience who can join an existing team or spearhead a changeover.

Although the XBRL system is relatively straightforward, companies face plenty of implementation challenges, including technical and regulatory considerations, as well as significant start-up costs. Whether they choose to outsource most of the work or develop in-house resources, the process is expected to be labor-intensive and time-consuming.

Often, implementation has two separate but interrelated parts. The first is establishing what needs to be done and the second is mobilizing resources — people and software — to design, implement, communicate and maintain the new system.

Many companies are starting with an internal audit to determine which data is affected, what systems and software they need and how their staff measures up to the needs. While SEC guidelines clearly state which filings are included and what information must be tagged, every company’s operations are unique and require a customized approach.

Required: A Range of Skill Sets
At each step of the process, the required skill set will change. To oversee the process, a company will need a project manager and team. Technology pros will be needed to analyze the current systems and determine if they can be adapted to XBRL and its classification system. Internal staff responsible for external reporting will have to ensure that the right data is identified and presented properly.

Equally important, there will be a need for knowledgeable people to help explain the changes and new requirements to colleagues, vendors and others. In short, XBRL will bring wide-ranging changes. To meet that need, companies and organizations are offering training programs. Software developers are creating XBRL programs, and consultants are carving out their part of the market. There is opportunity at virtually every point. Even as the economy continues to decline, professionals with XBRL knowledge and experience will be in demand. During these dark economic times, XBRL is likely to be a bright spot in the job market.