What is digital reporting?
1 minute read
What is digital reporting?
Traditionally, financial and non-financial information contained in an entity’s Annual Report and Accounts has been prepared in paper-based or static electronic formats (e.g. PDF or Word files) using traditional accounting software, spreadsheets and manual data entry.
These reports have been shared with stakeholders by post, email and on websites. They are principally intended to be read by humans and will usually require manual effort and technical expertise if consumers want to extract, analyse or compare information within or across reports.
By contrast, digital reporting makes use of technology to streamline the reporting process, improve data accuracy and quality, reduce burdens on markets, enhance transparency, and enable easier access to, and sharing of, information for stakeholders.
Digital reports are prepared and presented in structured, machine-readable digital formats using specialist software designed for this purpose. Digital reports are shared electronically through dedicated reporting portals, regulatory databases, or other secure online platforms, facilitating faster and more efficient data exchange between entities and stakeholders.
The digital data standard that underpins these digital reports is called XBRL.
What is a digital data standard?
A digital data standard is the agreed set of rules for how information is represented so different software can store it, transmit it, and interpret it consistently. The key benefit of digital data standards is that they create interoperability for all stakeholders:
- developers can build to one shared specification
- users aren’t locked into a single app or device
- people creating files can share and reuse content confidently, knowing it will open, display, and behave predictably across systems.
Without standards, every company would have to invent its own format. Sharing files would now face constant compatibility and conversion issues.
Most of us use these standards every day without noticing.
- HTML is the common format for web pages: it uses tags to describe structure (headings, paragraphs, links) so any browser can display the same content.
- JPEG is a standard way to store photos: it compresses images by keeping the detail our eyes care about most and throwing away some of the rest.
- MP3 does something similar for sound, using models of human hearing to shrink music files while keeping them listenable.
XBRL is the same: it is the standard way to represent business reports so computers can read, check, and compare them.