Reference Classification System of Financial Information (RCSFI)
Businesses in the Netherlands are legally permitted to use their own formats and codes for bookkeeping, general ledger, profit and loss accounts and balance sheets. Legally prescribed templates only apply to specific reports, such as tax declarations.
A group of private-sector bodies, software companies and government institutes have developed a standard in order to further integrate and automate the chain of administrative processes: the Reference Classification System of Financial Information (RCSFI) or in Dutch “Referentie GrootboekSchema” (RGS).
The RCSFI is explicitly positioned as a reference classification and not as a mandatory standard. To ensure companies can connect their ledgers to RCSFI, it contains all the ledgers which are required to report to the Dutch government and most of the ledgers used for internal reporting.
The technical format for automated data transmission between various software packages and between different parties used in the Netherlands is the XBRL-format in the context of Standard Business Reporting (SBR). Providing digital reports by SBR has been made mandatory by the Tax authority and the Chamber of Commerce. Hence it also became the standard for a number of other uses, like financial reports that are required by private banks. To meet this standard, the RCSFI is connected to XBRL-tags in the Dutch taxonomy. This enables reporting directly from the general ledger to the government.
Use of RCSFI helps accountants improve service delivery to their clients:
- Administering accounts is more efficient since all accounts are referenced to a standard classification. Compilation of reports is more efficient due to the connection between the RCSFI and SBR
- Better insight: standardisation allows for improved data exchange between systems
- Improved financial analysis through comparable data. Standardisation also provides opportunities for government agencies to reciprocate data exchange by providing aggregate data
- Improved quality of financial accounts by connecting the general ledger with other systems in the financial administration (such as e-invoicing, salary administration and point of sale systems).
How does it work?
Table 1 gives an example of a selection of the RCSFI and a mapping to SBR. The first column of the table shows the unique alphabetical code that is assigned to a specific item in the RCSFI. Using these unique codes, software developers can automate data processing, importing and exporting routines. The first column also shows the hierarchical nature of the RCSFI, in which items are broken down into underlying details, up to level 5. Businesses are able to choose the level of detail at which they wish to record their data, depending on their specific situation like types of costs and revenue.
Table 1: Example of the Reference Classification System of Financial Information (RCSFI)
|BVrdHanVoo||Stocks of trading goods||12411|
|BVrdHanHW||Re-valuation of stocks of trading goods||12412|
The descriptions can be changed, allowing for use of other languages (such as in the example above). Accounts in the RCSFI are either debit or credit. If an account can be changed to credit or debit (through a negative value) there is a contra-account: the reference turn-over code.
Who uses RCSFI?
The RCSFI is integrated into the software of various software providers in the Netherlands. An overview of software providers that have implemented RCSFI is available on www.rgsready.nl (in Dutch)
More information on RCSFI is available in Dutch on this website.
For questions or inquiries, please contact us through this contact form (in Dutch).