Learn How to Save 30+ Hours/Month During the Revenue Process

12/17/2019
Learn How to Save 30+ Hours/Month During the Revenue Process

Disparate data is disgruntled data. It’s only valuable to one person at a time, at one specific point in time. Siloed data stored in spreadsheets on someone’s computer is risky because you don't know how old it is, and it may conflict with your up-to-date production data set. Upon the data being shared, it's nearly impossible to track down whose data is accurate or current. Variances or uncertainties in data can lead to possible rework and make revenue accountants’ jobs difficult.

There are typically four stages of evolution within an oil and gas accounting department as you progress to more automated processing. If you find yourself occupying stage one or two, you’re likely spending significant time on manual processes and system workarounds, attempting to make unsophisticated accounting solutions perform sophisticated tasks.

  • Stage 1: Small scale; one person managing everything with manual processes, simple accounting systems, and spreadsheets.
  • Stage 2: A few accountants with no standard processes; using an oil and gas accounting solution, but not able to leverage all functionality to gain efficiencies because of time and resource constraints.

When you add up the manual hours spent on each task in the revenue process, you begin to see just how much time is allocated to completing these activities. But what if we told you there’s a way to simplify, speed up, and strengthen your accounting processes while making the revenue process easier?

The Revenue Process: Time Spent, Time Saved

Action/Activity

Estimated Time to Complete Per Month

How to Streamline (Automated Tools to Employ)

Statements are received from the pipelines, purchasers, and remitters

--

--

Data is compared to production data; numbers are validated

1 – 4 hours (dependent on # of fields)

Reporting or automated workflow tool(s)

Revenue is calculated based on the details in the contract (contract price)

1 – 6 hours (dependent on # of fields)

Automated workflow tool

Distribution (allocation) is calculated for each owner

15 minutes – 1 hour (dependent on # of owners on the decks)

Automated workflow tool

Distribution (allocation) numbers are compared to prior months

15 minutes – 1 hour

Reporting or automated workflow tool(s)

Statements, comparison reports, reconciliation, and supporting materials are printed and compiled

3 – 6 hours

Automated workflow tool

Revenue supervisor approval is requested

  • Statements, comparison reports, input edit reports, and other supporting materials are presented to the supervisor who manually signs off (SOX environments) on the documents

3 – 6 hours (dependent on # of input vouchers, statements, etc.)

Automated workflow tool

Approved reports are scanned and become the distribution audit

1 – 2 hours

Automated workflow tool

All relevant information is shared within the company

  • Data storage is not controlled, and information is saved haphazardly 

1 to 5 hours (dependent on how information is shared)

  • System financial reports – 1 hour
  • In-depth analysis – up to 5 hours

Automated workflow tool

 

Total: 10.5 – 31 hours

 

Time associated with these activities is dependent on the number of wells a client is processing. These activities would largely be for operated wells, so non-ops are not included in the time estimates. This exercise assumes a small company with 100-500 operated wells.

  • These steps assume the work of one person over the course of one month (processing only)
  • These steps do not include any adjustments or reallocations that may be necessary
  • These steps do not include cutting checks (netted and regular) to the owners of record
  • These steps do not include creating and posting general ledger transactions for the closing process

These labor-intensive tasks take revenue accountants significant time to complete – sometimes more than 30 hours/month. Essential to financial efficiency is streamlining this process. An integrated, industry-specific solution (or set of tools) that helps reduce the number of steps required in the revenue process is also what eliminates the manual strain.

By employing automation in accounting, revenue accountants can save significant time and consolidate workload for maximum productivity.

Swap Time-Consuming Steps for Automation Benefits

  • Accurate Data: Accounting software quickly computes all revenue distribution totals and is much more accurate than hand-calculated figures and spreadsheet formulas, both of which are often subject to mistakes. In fact, 88% of all spreadsheets contain errors.
  • Consolidation: All information resides in one place. Data that spans departments stays organized and is easily accessible.
  • Records: Prior month distributions are easy to locate and reference. No more digging through files and data looking for information.
  • Time Savings: Reduce the time spent completing the revenue process through automation that removes burdensome steps.
  • Reporting Capabilities: Easily compile accurate reports that show revenue distributions for any period of time and seamlessly share those with a revenue supervisor (and anyone within your company).
  • Complete Visibility: Having a clear and timely picture of revenue distributions and approvals allows visibility into each stage of the process.

 

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