ESEF - header blog post

Why companies (should) prefer an integrated ESEF/UKSEF solution over a 'bolt-on' solution

The most common solution used today to create the annual report in the European Single Electronic Format (ESEF) or UK Single Electronic Format (UKSEF) is a 'bolt-on' solution, i.e., using a tool to convert the PDF version of the report to the electronic format. Typically, in a traditional process, using office tools to collect and write the content and typesetting the annual report in Adobe InDesign. 
(Basically, this conversion tool is "bolted on" to the process of creating the PDF.)

Although this option sounds appealing—as it does not require you to change the production process—it has proven to be error-prone and inefficient, especially after the introduction of block tagging in 2022 (see our blog post 'ESEF/UKSEF block tagging—the devil is in the details'). As the Financial Reporting Council's (FRC) 'Structured digital reporting' publication also underscored, companies appear better off with an integrated solution.

Let's dive into the main differences.

The 'bolt-on' solution requires a complex Excel spreadsheet with duplicate numbers to drive the ESEF/UKSEF creation.

Two files need to be fed to the conversion tool; the PDF is converted to the ESEF/UKSEF XHTML—the human-readable part (see below)—but a second file, an Excel spreadsheet, is required with duplicate numbers and complex "coding instructions" to be able to do the tagging—the machine-readable part. 

Having to duplicate the numbers is never a good thing when it comes to accurate reporting. But the complex coding-like constructs in the spreadsheet that need to mirror the PDF structure really thwart this approach. Having to maintain this spreadsheet is time-consuming and frustrating,

In the integrated approach, there is no need for a second file; the same tool for writing the content is used for tagging and generating the ESEF/UKSEF filing package: no duplicate numbers but accuracy, no complex spreadsheet, and no wasted time.

Today ESEF and UKSEF focus on tagging  numbers, but with the advent of sustainability reporting standards—most notably the IFRS Sustainability Disclosure Standards globally and the EU Sustainability Reporting Standards—machine readable/electronic reporting will also apply to  numbers/metrics, adding to the complexities and challenges of annual reporting and adding reasons to consider a more automated approach over the traditional process.

The PDF to ESEF/UKSEF XHTML conversion in the 'bolt-on' approach is not fail-proof.

It is awe-inspiring how the resulting XHTML replicates the PDF... However, this human-readable presentation is not browser/web-native or responsive (see our blog post 'Embracing ESEF/UKSEF as a web-based format'), and the conversion is not fail-proof. There can be PDF constructs that stall the conversion or lead to an incorrect filing package. (As Murphy and you know, this will typically happen just before the filing deadline.)

In an integrated solution, the system generates the XHTML: fail-proof (also see our blog post 'Embracing ESEF/UKSEF as a web-based format').

'Bolt-on' can take hours or even days; integrated takes only minutes.

Generating the ESEF/UKSEF filing package in the 'bolt-on' approach is only partially automated; it involves user interaction, which can take up to several hours; for each report update.

When outsourcing the 'bolt-on' process to a service provider—pretty standard in the UK, by the way—progressing a report update to the filing package can take several days.

In an integrated approach, generating the ESEF/UKSEF filing package will only take a few minutes, not hours or days.

Reconsidering the annual reporting production process

So, it is clear that the integrated approach is sounder and should be preferred, making producing the ESEF/UKSEF version of the annual report much more efficient and significantly reducing the risks of—because of a failing conversion—not meeting filing deadlines or—because of discrepancies in the duplicate set of numbers—reporting incorrect results.

ESEF/UKSEF is another compelling reason for companies to reconsider the traditional annual report production process, modern reporting demands for shorter time to market, online engagement with (new) stakeholders, and efficient electronic reporting. 

Tangelo offers an integrated solution to generating the ESEF/UKSEF filing package from the same source as the designed PDF and microsite versions of the annual report. Because of Tangelo's native structured content format—the same as the electronic (XML/XBRL) reporting format—tagging facts and block tagging are intuitive and user-friendly. It also allows companies to produce a browser/web-native and responsive human-readable presentation that adheres to the corporate web style guide and maintains brand consistency.

Further reading: 

Webinar ‘Building ESEF Reports with Tangelo’ [on demand]

Webinar Building ESEF Reports with Tangelo

Check out our on demand webinar where we demonstrated the key features of Tangelo that help you with your ESEF report, followed by a Q&A session.