How Manual Processes & Workarounds Are Costing You Money11/06/2018
We all know the saying, time is money. What manual processes and workarounds are you currently using at your upstream oil and gas organization that are costing you time, therefore money? Are you even aware of them?
In this article we’ll go through a couple examples of manual processes that might be costing you time and money, and how they can be solved with an automated workflow.
One of the biggest challenges with manual processes and workarounds is that if you and your organization use paper, email, or any extra steps, workarounds often increase the time needed to complete tasks – whether it’s added approvals, printing extra reports, updating all the data manually, etc.
If you and your organization implement automated workflows, they can save time and money by the following:
- Sending the proper notifications to the proper recipients
- Prompting timely reviews
- Ensuring all steps are taken
- Automating steps
- Eliminating the need to print added reports
Information in a Timely Manner
In the JIB world, if someone isn’t notified or they missed a notice, they must correct their JIB decks and find everything that was billed incorrectly and run it through the reverse and rebilling process. The reverse and rebilling process will inevitably happen at some point as it’s just the nature of our industry. It requires a significant amount of work and, if you rely solely on manual workflows and email communication, you will be inundated with information being missed, not seen, or not seen in a timely manner. Also, a delay in this process increases the time it takes to get paid, which can lead to cash-flow problems.
Time and money is wasted when additional time is needed to figure out how far you need to backtrack to see what was billed incorrectly, so that you can isolate the transactions and reverse and rebill. If a timely notification was received, you could have been using that time to focus on other tasks and ensure that everything is billed properly.
No More Delayed Payments
When a new well comes online, a notification can be sent out to specific people, such as the accounting team, to inform them of this action. If this is not done promptly, owners and royalties could be delayed payment. This process is also often maintained on two or more systems, such as accounting, production, land, AFE, spreadsheets, and homegrown solutions.
A costly challenge to not having automated notifications is if you do not pay your land owners in a timely manner, you could potentially lose your lease.
Automated Payout Statements
If you have a well in which one of the partners has gone non-consent and you must track payouts, you need to be aware of it and keep the payouts up-to-date. You’ll need to provide payout statements to partners, which can be extremely complex. Even now, this is mostly monitored in spreadsheets because systems don’t offer the option to narrow down reports to people who are ‘close’ to payout. It’s also difficult to know what the previous months’ charges and revenue were to anticipate how ‘close’ or how much ‘closer’ owners get to payout.
As a well gets closer to payout, you must monitor it and make sure all necessary parties are aware. Checking these reports and owners each month, even each week, can be time consuming. Getting the data right to your email when it’s relevant will give back that time spent reviewing names and numbers. Also, there are times partners who went non-consent decide they want back into the well, and all the JIB and revenue decks change. An automated solution could easily provide you with all the decks needing to be updated, as well as sendoff notifications to the departments that this event has taken place and needs to be reviewed. No one would be finding out a later date, which helps prevent the pesky reverse and rebook process that can come when that data is not disseminated.
How much time and money could you start saving today by setting up your oil and gas accounting systems and processes properly with these automated workflows?
About The Author
Brandi Greek, Product Manager of P2 Workflow, joined the P2 Energy Solutions team three years ago, after spending numerous years as an accountant in the oil and gas industry. She devotes her days at P2 to devising ways to make the day-to-day lives of our customers easier with automated workflows. While Brandi is a Denver native, her love of travel has led her to spending some time living in South Korea and New Orleans – but will always call Denver home.