CSI, Sageworks use XBRL to integrate their products

by John M. Covaleski

Dexter, Mich. -- One of the newest product integration alliances between two software vendors features an XBRL twist.

Creative Solutions Inc., vendor of several types of applications used by accounting firms, has incorporated the Extensible Business Reporting Language, which provides for rapid access of financial statement data in electronic interchanges, into its integration link with business analysis software from SageWorks Inc.

The link, unveiled late last year, allows data from CSI’s accounting products to flow directly into SageWorks’ ProfitCents, which accepts financial data output from a company’s accounting software to produce written reports about the company’s financial position.

This is the first time that two vendors have utilized XBRL in integrating their respective products. XBRL is a derivation of the Extensible Markup Language, or XML, an Internet industry framework for languages that describes data and establishes individual "tags" for specific elements. The tagging enables users to automatically access specific items and format them to meet individual needs.

XBRL has been under development since 1998 by what is now called XBRL International, a consortium of about 200 businesses and agencies that are affiliated with technology or financial reporting. The American Institute of CPAs originally brought the group together.

The consortium’s more than 50 software development company members have all verbally committed to implement XBRL in their products, and several have added it. However, there has been no surge of XBRL activity by software companies primarily because end users have not yet been demanding the technology.

The CSI-SageWorks alliance could jumpstart XBRL development activity despite the lack of end-user demand, according to some software developers.

"This could be the kind of thing that propels XBRL by creating a virtuous circle," said Greg LaFollette, CSI’s product strategy vice president. "Vendors will see that more people are integrated on XBRL and will say ÔI better play and get my software to produce and collect in XBRL, too.’"

Dexter, Mich.-based CSI, a Thomson business, has been a leading XBRL proponent and pioneer. It added the capability to export XBRL-tagged reports in its products in early 2002.

"This alliance shows that you can use XBRL to exchange data -- and users -- regardless of whether they know about XBRL or want their applications to be able to exchange data with other systems," said Brad Saegesser, product manager with Moody’s KMV, a New York-based developer of credit risk evaluation software that is used primarily by the banking industry.

"If you want to share data between disparate systems, XBRL is an answer that does not require creating expensive proprietary interchanges, which should attract the interest of developers," added Saegesser, Moody’s representative on XBRL International.

The alliance is a major score for Cary, N.C.-based SageWorks, which launched an aggressive accounting industry marketing campaign in early 2002. Its flagship ProfitCents product is an "artificial intelligence engine," that interprets a company’s financial information through several means, including benchmarking key performance indicators against comparable data for the rest of the company’s industry, to produce written financial analysis reports.

Those reports can be customized for a variety of functions including credit analysis, loan reviews, valuations and equity analyses. They can also serve as a base from which the company or its accountants can set new strategies for the company.

The CSI alliance opens the door to a large pool of accounting professionals, which SageWorks considers to be a key market. CSI has some 50,000 accounting professional customers, including 20,000 users of the accounting applications that are now integrated with ProfitCents.

In the integration, the ProfitCents engine has been enhanced with the capability to read XBRL tags when collecting the data to produce its reports. All the CSI products involved have had XBRL export capability since early 2002.

The two companies announced their alliance a few weeks after SageWorks entered into a marketing alliance with AccountantsWorld, an accounting software developer rival to CSI. In mid-2002, SageWorks formed a marketing alliance with CPA2Biz, the Internet delivery arm for products and services produced by the AICPA.

However, AccountantsWorld and CPA2Biz are only making ProfitCents available for sale or review on their respective Web sites. The CSI-SageWorks deal is strictly a product integration.

According to LaFollette, CSI is not actively marketing or selling ProfitCents and receives no compensation for any sales. He said that CSI entered into the relationship to make more business functions available to its customers and because of the potential to promote XBRL and the overall concept of software product integration.

The more we move practitioners toward product integration, the better it is for us," LaFollette said. One of CSI’s main marketing strengths is that its products are integrated; its line of software applications includes tax prep and planning, depreciation, trial balance, auditing, Web-site development, and the accounting line, which includes write-up.

LaFollette said that CSI-SageWorks is the first multi-vendor XBRL-based integration of two previously unaffiliated applications. But he noted that CSI, in an earlier alliance linking its Write-Up Solution product with amortization computation software from TimeValue Inc., utilized XML tags developed by and for the mortgage industry.

SageWorks, which works exclusively with financial report information, had not used XBRL before the CSI arrangement. However, ProfitCents’ engine had XML capability, which made the move to XBRL easier.

"All we had to do was reconfigure those XML tags and map the CSI products’ chart of accounts to our input engine," said SageWorks chief executive Brian Hamilton. He also said that the company is open to entering into more XBRL-based alliances, but added, "We are more interested in getting data to our system, regardless of the format it is in."

ProfitCents is designed to integrate with any accounting application that can output data into Microsoft XL, which means the entire universe. Even products that add XBRL capability, such as CSI’s, still retain pre-existing export capabilities, such as XL.

Prior to last year’s accounting industry push, SageWorks’ most significant industry alliance had been with Intuit Inc.’s entry-level accounting software QuickBooks. That integration, which is not based on XBRL, has created a supplemental financial analysis product that Intuit markets to QuickBooks users under the private label Expert Analysis.

Hamilton said that SageWorks has 4,000 customers, but did not break out the number of public accountants. In addition to its accounting industry alliances, SageWorks’ main distribution has been to multi-national banking companies Wells Fargo and Citibank, which use the product internally to do analysis reports on customers, according to Hamilton.

An Intuit spokesman declined to comment on the SageWorks alliance, citing a company policy prohibiting public comment on third-party relationships. However, in what may be construed as an endorsement, Intuit recently enhanced the QuickBooks-ProfitCents links.

CPA2Biz marketing director Melissa Rothchild said that her organization expects strong practitioner acceptance of ProfitCents, but it’s too early in the alliance’s history to quantify the uptake so far. "We’ve just started, but we have high expectations because ProfitCents is a tool that helps CPAs communicate with their clients," she said.

AccountantsWorld chief executive Chandra Bhansali said, "It will take a while for accountants to become aware of what this technology can do for them."

For reprint and licensing requests for this article, click here.
Technology
MORE FROM ACCOUNTING TODAY