4 Must-Haves for Oil & Gas Accountants10/23/2018
It’s no secret that oil and gas accountants face work-related stressors on a daily basis. We broke down these stressors and how to solve the issues by curating a list of the top four must-haves oil and gas accountants need to streamline their process and ensure accuracy. Check them out!
1.) Master Data Management
To have an efficient and auditable accounting process, it’s critical that master data have a single system of entry and record. In upstream oil and gas accounting, there are several key pieces of master data, including wells, names and addresses, ownership, chart of accounts, agreements, and production. The oil and gas accounting process, both from a revenue side and a cost side, requires all master data listed above – making it imperative that the data is accurate. If data is entered into multiple systems, not only do you have the cost of time to enter the data, but it can also introduce inconsistencies across the applications which leads to errors, audit issues, and the need for reconciliations. Having a single point of entry and record for this data, with closed loop integration between these applications and departments, increases the timeliness and quality of the accounting data – reducing the chance of prior period adjustments, audit risks, and regulatory fines.
2.) Ability to Document & View the Audit Trail
As in all accounting, audits are a standard part of the process. In oil and gas, we have the added burden of partner audits and regulatory audits – both of which can lead to fines and penalties. Auditors require all source documentation, such as purchaser statements, agreements, approvals, and proof of output, often in printed report format and final distribution or billings. This can be a nightmare to manage and track, and it never fails that something is missing the month the auditor has chosen to review. First and foremost, it’s important to have a system of record for processing the accounting. Doing these tasks in excel is an inherent audit control issue since they can be changed manually, often have incorrect calculations, and can be lost or overwritten on servers. Having a workflow process that captures the documents in an electronic format and ensures all documents are present, as well as the approval history, can make audits a breeze.
3.) Insight into Data
Having accurate and timely reporting is critical to a successful accounting group, however, reporting is not straightforward. There are different groupings and consolidations, as well as the need to see expenses and revenue at all levels of the organization – from the corporate level down to the well. A great reporting tool with an oil and gas-specific reporting data model that is refreshed in a timely manner is the best way to access and analyze your data, turning it into actionable insight. It’s not just standard columnar reports, but rather interactive graphs, trends, and other visualizations that bring meaning to the data and highlight inconsistencies that could become a problem in your business or in the accounting process. Overall it will allow for:
- Transparency – creating a single source of truth that can be accessed across multiple departments.
- High Level Analysis with Drill Down Capabilities – analyzing data from a high level, with the ability to drill further down into the details that make it up.
- Exception Reporting & Data Anomalies – identifying where data looks unusual and varies from month to month and being able to explain those discrepancies quickly and effectively.
- Flexibility for Branded Report Formats – being able to create highly stylized reports; ‘look and feel’ and detail content that is consistent with what has been required by your brand / organization previously.
- Compiling Data Across Multiple Source Systems – tying together data from one product to another.
- Easy & Flexible Ad-Hoc Reporting – creating your own styles and formats when curating your report.
- Push Reporting – automating scheduled reports to target audiences.
4.) Effectively Manage & Monitor the Business Process
As reporting tools begin to provide a cleaner and more in-depth look at data, a workflow tool can help you create and document the best practice for your organization and follow all revenue and JIB distributions throughout their monthly lifecycle – ensuring everything runs more efficiently. Gone are the days of only a single accountant or revenue team member knowing where monthly processing is for a given sales facility. Now, the process is completed earlier in the month with everyone staying in the loop! An effective workflow will also help automate repetitive tasks and will leave a clear audit trail for quick reference at any time.
Workflow helps to:
- Automate Processes – utilize REST Services or process modules in the back ground to decrease and/or eliminate repetitive tasks by letting the workflow tool do them for you.
- Stay on Task & on Track – no more cutting corners or skipping steps; best practices are defined and followed, allowing supervisors to have a clear line of vision into process lifecycles.
- Reduce & Eliminate Repetitive Tasks – gain the insight to help reduce the time of completing repetitive tasks and leave a clear audit trail for quick reference at any time.
- Keep an Audit Trail – rest assured knowing that every file and approval is created, uploaded, and stored in one place for quick reference; auditors will be able to see each step in the process, decreasing the amount of questions and requests made.
- When You Find an Exception, Workflow Kicks In – let a workflow act as a first alert by isolating these exceptions and presenting them to you as they arise.
- Ensures Processes are Followed – a good workflow tool won’t allow you to skip a step in the process and can send automatic notifications across your organization when an ownership change occurs.
About The Author
Tim Wadle, Vice President of Product Management at P2, has more than 20 years’ experience developing software solutions for oil and gas companies and has served on many industry committees along the way, including the American Petroleum Institute’s Committee on Production Measurement & Allocation and the Energistics PRODML Executive Committee. His work has been published in Oilfield Technology magazine and he has also been a featured speaker at the Offshore Technology Conference and AICPA Conference. When he’s not behind his desk, you’ll likely find Tim skiing one of Colorado’s slopes or biking one of its trails.