HUB ORM Benefit #2 – Single Entry Oilfield Accounting

Simplify daily expense entry procedures for streamlined field reporting and invoice reconciliation.

The key to good and accurate oilfield accounting is simple accounting. What could be simpler than going to one place to enter all your expenses, truck tickets and comments? One place to enter all the expenses for rentals, muds, and everything else!

Every day, entry of service tickets, invoices and expense allocations for rental activity requires highly paid, and highly specialized engineers to focus on their least favorite chore. Accounting. A necessary evil of the oil patch to accurately capture and report the financial activity related to constructing, drilling and completing a well. In addition to managing and monitoring how successful the operation of the 30 to 50 or so services perform, each doing their part in bringing the well on line, the accurate recording of the associated expenses is the most valuable business process a supervisor can do for the company they work for.

It is no secret that everyone wants to bring a well home with the least possible expense, particularly in an environment of dwindling oil prices. On each well, this starts with recording where every penny is being spent. But with so many things going on, in a very short period of time, it’s so easy to record something wrong. Too many days recorded for the rental, multiple payments for the same thing, paying too much for services rendered, missing expenses, and the list of potential cost pitfalls goes on. Where things fall apart is not just in the recording of the expenses, but also in the reconciliation of the invoices presented by vendors to pay for services rendered. Here is where everyone from the supervisor down the line through the superintendents, managers and accounting staff spend tremendous effort and valuable time to make sure a fair dollar is attributed to the service provided.

Single Expense Entry

It should be a relatively simple thing to record the expenses, and when the invoice comes in, validate, approve and pay. What makes accounting the least favorite chore, is that recording expenses is not a simple thing for die hard field personnel. Rentals, muds and everything else is normally done on a variety of specialized forms that were never designed and scrutinized from the fields’ standpoint for easy entry, review and secure reporting.

Easy entry requires intuitive tools and simple forms to make both data gathering and key entry simple. In my last blog I wrote about importing lists from previous wells, and the one before that on the importance of standard product and vendor naming, just some of the tools we’ve focused on to make things simpler in the field via our Operations Report Manager plugin for Oilfield HUB. Another great help, and one of our new service features, is to go to single entry form to record everything about your field and well expenses.

Keep It Simple

Easy entry is what you get with our HUB ORM plugin!  Artificially intelligent popups minimize the number of keystrokes taken to record the information about each of your transactions.  In the course of the average day a bunch of documents collect, like truck or service tickets, invoices and so on.  Click a button to record an expense to the daily summary, and an intelligent popup offers a selection of the services, products and chart of accounts to assign to the expense.  In just three clicks, enter the cost, record the ticket, make a comment if necessary and save your data.  You’re done.  Now that’s simple!

Expenses That Make Sense

Reviewing your expenses involves looking at what has been entered today, then looking at what was done on previous days to see if anything was missed. In HUB ORM, double-check to see if the expenses for today look right, are not duplicated from other days, and so on. There is no more powerful way to check your work before it is sent to the central office as part of the daily reports.

Protect Your Information

Secure reporting boils down to two things.  Restricting the view of reported financial information to specific individuals, and preventing changes to past expenses that have been reported.  It is important to be able to lock transactions, including previously reported totals.  Once daily totals have been reported, it does not make sense to allow users to change past expense figures.  The solution?  An easy way to manage adjustments in ‘todays’ reporting with comments explaining it was an expense from a prior date.

 

Approving Expenses

Being able to sort all expenses, by chart of account, vendor, product, date, truck ticket, and invoice is a most powerful tool. In the hands of your accounting staff who are trying to reconcile and approve supplier invoices it only takes seconds to find the transaction as originally reported. In the hands of the field supervisor, it is a super quick way to check on what has been reported.

What could be simpler than an end of well report that clearly lists out all the transactions by date?  It’s the complete expense history of the well based on what was spent, and when it occurred.  The bottom line on efficient and cost effective well management lies in the numbers.  Of course superior operations management is key to every well, but the measure of the effectiveness of any operation is reflected in the actual AFE dollars spent!

January 8, 2015

 

Bob Morrell Vice-President Operations Leadstone Group Inc.

Schedule a Demo:                                                         sales@leadstonegroup.com                (403) 537-6560