Rivet to help businesses keep financial reporting in line
By Julie Poppen, Rocky Mountain News
Michael Rohan long suspected there had to be a better way to make sure accounting practices were actually accountable. The Colorado native, entrepreneur and accounting professional thought about launching a business around this idea.
Then several things happened to transform Rohan's idle musings into a tangible business concept, namely the major accounting scandals of the past several years. Denver Tech Center-based Rivet Software was launched in mid-2003. Its first commercial product will hit the market Monday.
"This thing was just eating at me," said Rohan, 56, Rivet's chairman, president and the founder of Denver-based FRx Software. "I was watching the world, watching technology and Sarbanes-Oxley and Enron, and I thought, 'Maybe there is a perfect storm of need out there for what we're doing here.' I finally pulled the trigger."
The Sarbanes-Oxley Act, named after its congressional sponsors, refers to legislation aimed at addressing corporate malfeasance. The act, which took effect in 2002, requires more transparency and clarity in all financial information given to investors.
Rivet's aim is to help businesses create financial reports that meet new standards such as those outlined by Sarbanes-Oxley. Rohan says that over the past 50 years in corporate America, largely because of the computer revolution, the accounting books have gone "further and further away from the accounting and finance people due to the complexity of the information."
Rivet's goal is return accountability to the accountants - not the IT department, the lawyers or the CEO's office.
"The whole point of Rivet . . . is we can reconnect the finance and accounting group with the innards of an organization," Rohan said. "This lets accounting and finance people have total control, complete access of everything, the whole enchilada."
Wayne Harding, Rivet's vice president of business development, puts it more succinctly: "Now accountants and finance professionals want to be more in control because they know, 'I'm the one who could potentially go to jail.' "
Rivet's first product is called Dragon Tag (a play on words referring to a drag and tag computer function). It was released on a beta basis in November. The program easily translates Excel and Word spreadsheets and documents into XBRL or Extensible Business Reporting Language, which is being embraced by financial institutions and overseeing agencies worldwide.
Dragon Tag, sold at a cost of $299 per license, supports generally accepted accounting principles, allows users to customize an industry taxonomy specific to reporting needs and enables users to review and validate data before creating XBRL documents.
Just over a year ago, the FDIC announced it would collect data in XBRL format from more than 9,000 banks beginning this quarter. As Rob Blake, Rivet's vice president of product development, puts it, the announcement was another "shot across the bow" for Rivet.
In addition, the Securities and Exchange Commission announced a voluntary XBRL filing program set to begin in March. The SEC's move helped establish the credibility of XBRL internationally, company leaders say. The United Kingdom's Inland Revenue and Financial Services Authority is also pushing ahead with adoption of XBRL standards.
Microsoft was the first technology company to release its financial statements in the XBRL standard in 2002. Last week, Microsoft used Dragon Tag to create its quarterly earnings release in XBRL 2.1.
"With this user-friendly application, we were able to create and release our XBRL-compliant financial report with little disruption to the normal reporting cycle," said Michael Ohata, Microsoft's director of business reporting.
XBRL's momentum gave Rivet a perfect platform to roll out Dragon Tag at the XBRL International Conference in Brussels, Belgium, in November.
"I hate to call it Mick Jagger walking across Larimer Square, but it went over very well," Blake said. "For those who have lived through the pain around corporate reporting and compliance and transparency, the response we're getting is very good."
Blake said the software is also simple to use.
Last month, Rivet announced a partnership with PR Newswire, which discloses earning reports and other financial information for more than half of the public companies listed on the New York Stock Exchange, American Stock Exchange and the Nasdaq Stock Market. An agreement was also forged with EDGAR Online, a provider of business and financial information on global companies to financial, corporate and advisory professionals, to provide Dragon Tag to subscribers of EDGAR Online Pro.
Dragon Tag is only the first of "a whole series of releases coming out," Rohan said.
Rohan, who launched his career as controller for the Aspen Music Festival in the 1970s, started the business with money made and knowledge gleaned from his time running FRx Software, which became the financial reporting mainstay for most midsize corporations. He founded FRx in 1989 and sold it to Microsoft Business Solutions in 2000.
"FRx was a hand-to-mouth thing the entire way," Rohan said. "Fortunately the deal with Microsoft came out in a way I can fund this thing and do it the right away."
February 11th, 2005 ·
