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Merrill Bridge Changes the Market for SEC Disclosure Management Programs

Merrill Disclosure Solutions | April 17, 2014

An interview with Patrick Sheridan, Product Manager for Merrill Bridge.

Patrick Sheridan

Pat Sheridan leads the development of Merrill Bridge, Merrill Corporation's software-as-a-solution (SaaS) product for managing SEC disclosures. He is a CPA and has also held many positions in the areas of finance and financial reporting, including as a CFO. During an interview with Dimensions, Mr. Sheridan discussed the growing corporate trend toward the use of software solutions for managing SEC disclosures. He also explained why Merrill Bridge stands out in the market of SaaS offerings for disclosure management.

What are SEC disclosure management programs and platforms?

First of all, let me differentiate between programs and platforms. An SEC disclosure management program (or piece of software) is a SaaS or web-based solution that a client can use to manage, prepare, assemble, and file its required SEC filings. That would include 10-Ks, 10-Qs, 8-Ks, and a variety of other required disclosures for public companies, as well as EDGAR HTML and XBRL, if warranted. A platform, such as what Merrill presents as Merrill Bridge, is software wrapped in a suite of services. It is how a company gets from the blank page to being successfully filed with the SEC, when the client requires some level of service above and beyond simply software.

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Here at Merrill, we use Merrill Bridge a bit interchangeably, as both a program and a platform. The Merrill Bridge program, from the client's viewpoint, is a SaaS solution for meeting compliance-filing requirements with the SEC - whereas the Merrill Bridge platform, which is a little more invisible to the client, is what's happening from the Merrill view behind the scenes to fulfill the client's expectations. Our clients will range from being fully self-sufficient on the SaaS tool to clients who take advantage of the collaboration features and having that control of their filing in their hands - but then are not interested in completing any of the complex tasks around, let's say, formatting for HTML or XBRL tagging or construction of a taxonomy.

Why have these programs become popular? Surveys show an increase in their use?

I think the answer falls into a couple of areas. From what we've found in our survey feedback, as well as from talking to existing clients and prospects, we have distilled down to what we're calling the three Cs: Control, Collaboration, and Confidence.

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What we're hearing out there is, number one: "I want to take control of my filing." Right now, what's happening in the full-service arena is that our that their complex XBRL file sets are developed appropriately. And so by subscribing to a program like Merrill Bridge, they actually decide when they're going to leap into their peak period, and they can decide to go in even earlier to smooth out the peaks and valleys of the hours that are required to get their filings done.

Under collaboration, Merrill Bridge provides a true Microsoft® Word-based collaboration tool set, so that the filers working in teams, whether the team has 2 members or 100, can have everyone working on the same document at the same time. The process becomes much more efficient, saving both time and money.

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As for confidence, clients want to be confident that, for example, the value they enter for revenue is the value that shows up for revenue everywhere: in their EDGAR document (and that may be in multiple places), in their XBRL file set (where it also may be in multiple places), and in board reports or any other kind of report that relies on that same core set of values. Merrill Bridge, a single-source tool, gives clients that comfort and confidence. We believe that Merrill, as a service organization, adds to that confidence, because of the world-class service set we've wrapped around Merrill Bridge.

How will these programs change the future of financial reporting?

Overall, what these programs are doing is creating a more cost-effective, more efficient approach to complying with SEC requirements. It's going to reduce the costs to get filings done. It's also going to smooth out, as I mentioned, the peaks and valleys of a client's time. There will still be peak filing periods, but the peaks will not be extremely different from the valleys in between. That is going to change the face of the job called external financial reporting - making it a more attractive job in the accounting and finance industry because it is going to allow flexibility in how one works.

I think the other change coming to financial reporting is the single-source document, which is getting closer and closer. What everyone believes is going to happen eventually is that there will be one filing type that is electronically filed with the SEC. The way people will view that is in how they assemble the data that is filed. Years ago, we went into EDGAR; now we've added XBRL; the next step is a combined document; and then ultimately it will be data that's being filed that can be extracted either for viewing in different methods or for comparing to other companies or to the company's own past filings.

Why do some companies use these disclosure management programs while others outsource the preparation of their EDGAR and XBRL documents?

There are various reasons why a filer may choose to outsource the disclosure process; for example, a company might not have the knowledge and the staff to take on more of that responsibility and might prefer to use a service-provider. We believe there will always be companies that prefer the service-provider approach. Merrill will retain the world-class systems and professionals necessary to ensure that those companies are served. Those companies may have a knowledge base, but if the knowledge base is in one person in a company and that person were to leave, that knowledge base exits pretty quickly. So that company will determine that the best thing to do is to stay with an outsourced provider of all those services. For other companies, it is just a preference for the way they like to work. They prefer a high-level service organization like Merrill. In the feedback we get from clients, we can identify those clients who regularly tell us how important the service level is and the team that provides services to them. We do not imagine that many of those clients will be standing in line to adopt a SaaS solution for filing.

Merrill has a full suite of financial disclosure services. How does Merrill help a client decide whether outsourcing, insourcing, or some combination of the two is best for the company?

Understanding the client experience is paramount in determining with the client what is the best approach to filing. Many filers have already decided they prefer to move to a SaaS solution. We work with them to understand their in-house process fully, ascertain the level of independence they desire, and assess what level of professional services is appropriate.

What are some of the features of Merrill Bridge?

There are several key features integrated into Merrill Bridge, which is programmed as an enhancement to the Microsoft product suite. With Merrill Bridge, the user experiences a more stable and powerful integration of the Microsoft Office suite, which allows for improved data-linking, better styling for EDGAR and print, and presentations in PowerPoint®.

Merrill Bridge is a single-source tool, as are some of the other SaaS solutions out there. In a full-service offering, instead of developing an EDGAR HTML document as well as an XBRL file set, the Merrill Bridge client has one source of data that is presented in EDGAR HTML, XBRL, and many other output formats.

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Merrill Bridge also offers the multi-user collaboration mentioned earlier - the ability for all team members to have access to the report so that a person can work on one section while somebody is working on another section. This is a team approach, with review features. What companies do in-house now is that one person generally owns the Word document; all the edits go to that person, who must manually update the Word document.

Users of Merrill Bridge will find they have simplified their roll-forward process. This is a huge time-saver for our clients. Currently, we are getting feedback from clients that rolling forward their financial documents from one quarter to the next is measured in hours. With Merrill Bridge, the roll-forward process can be measured in minutes.

Merrill Bridge employs a robust data- and text-linking capability. We are using Microsoft Office and enhancing the linking capabilities between Excel® and Word. The numbers are captured in an Excel workbook, and the words are managed in Microsoft Word. Linking allows the user to easily update values, dates, and text strings that are presented repeatedly throughout the document.

Finally, Merrill Bridge leverages the power of ongoing innovation by Microsoft. For example, upon launch on March 31st, Merrill Bridge will have been fully tested and verified for use with Windows® 8 and Office 2013. We will then continue to keep pace with the enhancements that Microsoft brings to its products.

What has been the initial reaction to Merrill Bridge from clients?

Overwhelmingly positive. We anticipate continuing to bring on board not only new Merrill clients but also full-service clients transitioning to this platform - some of them have been considering SaaS solutions for quite some time and are very excited to see this offering from Merrill.

How are you positioning Merrill Bridge, considering that its success could affect the sale of your full outsourcing service?

Merrill offers a full suite of financial disclosure solutions, which includes Merrill Bridge. We do not think that all of our existing clients will want a SaaS solution, so we consider Merrill Bridge to be an expansion of our existing offerings. It will be a new way to connect with Merrill for our existing clients who do want a SaaS solution, and it will attract a much larger audience of clients who are considering a SaaS solution for their financial disclosure needs.

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