Standard Business Reporting Makes Sense

SBR (Standard Business Reporting) is a strategy concept that at its root is very simple. It involves eliminating duplication in reporting. Governments have been finding it very useful for reducing costs, both for themselves and for the organizations that report to them.

Essentially, SBR involves identifying all duplication in reporting requirements, standardizing those requirements and then eliminating the duplication. For example, a national government normally has agencies to collect income tax information, statistical information and, in many cases, regulatory information.

Each of these agencies will usually collect information like sales, payroll expense, net income, etc. That means the filers must submit the same information to each of the agencies. Each filing costs them money. If the duplication were eliminated, their filing costs could be reduced substantially. If you think about it, there are many different kinds of information collected, and duplication in many of them. So the savings can be very large.

Of course, the items being collected by different agencies might be defined differently, so the duplication may not be exact in some cases. For example, net income for tax purposes maybe different than net income for statistical purposes. This is where standardization comes in. The definitions can be standardized so that elimination of duplication is possible. Sometimes this is straightforward; other times, it cannot be done, whether because of legislative constraints, or administrative constraints in one or more of the agencies. But often it can be accomplished, perhaps by identifying common elements to those items, as long as the standardization is diligently pursued.

Once standardization is accomplished to a satisfactory degree, the items of information can be collected by a data collection agency, working in cooperation with the agencies involved, so that the data only needs to be collected once, thus achieving the objective of making life simpler and less expensive for the filers and cutting red tape.

Numerous governments around the world have been implementing SBR. The most notable are Australia and The Netherlands, both of whom have achieved considerable savings. New Zealand has implemented SBR and most recently, the State of Indiana reported beginning an SBR effort. Other governments have conducted exploratory or preliminary work, including Denmark, Sweden, Finland, Turkey and Poland, among others.

The starting point for implementing SBR is to identify the information items being collected by a government and then exploring the ability to standardize and eliminate the duplication. This is the core of the effort and is a big job. Then a technology needs to be selected that is good for transmitting information among different platforms and computer systems. XBRL (extensible business reporting language) is most often used for this purpose, but there are alternatives, including XML, JSON, even Excel. This is a significant decision that needs to take into account the advantages and disadvantages of each technology. There are advantages and disadvantages of each. 

SBR is an ongoing significant activity, but the benefits are likely to exceed the costs. It makes a lot of sense. More information is available from the SBR websites of Australia and The Netherlands.


Preparing for the Aftermath

One thing businesses have earned when this pandemic got going and they had to restructure many aspects of their business was that in some respects they were not well prepared for such an occurance. They can be excused. Who could have foreseen it all?

One of the key areas where preparation could have been better for many companies was in the area of employees working at home. Security structures for home environments needed to be ramped up quickly, in order to protect key data such as customer information and sensitive transactions such as cash transfers in and out of bank accounts.

It’s never too early to start planning for the next time and for the changes that are likely to survive the current pandemic. This means doing things like improving support for offsite workers, with better transmission protocols and security for offsite transactions and data, instruct and provide tools for the staff to protect themselves from phishing attacks, lock down APIs, clean up code, review cloud architectures, and other similar steps. For more , check out this excellent article 

No time to Reduce Security

In the face of the pandemic, companies are cutting expenditures, and as often happens, it appears they are cutting expenditures on cybersecurity. “Gartner estimates a $6.7 billion decrease overall in global security spending in 2020 for software and services as a result of the economic impact of the pandemic, while Forrester Research has warned security teams to expect to see leaner budgets and trimming of their already-thin staffs.”

At the same time, increases in online business and offsite working have led to new security challenges. It seems the wrong time to be cutting cybersecurity expenses.

Part of the reason for the cuts is that companies are increasingly moving to cloud systems, and using cloud based security (SOC). This may not be a good thing. As companies outsource their security they tend to lose some control over it which presents a new set of issues. They may find they need to renew their security spending sooner than they thought.

CPA Founding Partner

Chartered Professional Accountants of Canada (CPA Canada), one of the largest national accounting organizations in the world, has chosen to become a founding partner of ThinkTwenty20.