Why invest in an oil and gas accounting program?
We can all think of reasons why NOT to buy a product, and oil and gas accounting software is no different. Sometimes it’s about price, timing, fear of having to switch to a new program, fear of not liking the program after all. What about all the reasons why you should invest in an oil and gas accounting program?
I posed this question for our clients over the last few weeks wanting to find out what the driving forces are for actually purchasing a program – and not necessarily just SherWare’s software – any oil and gas accounting program. Here are their responses:
Why should a company invest in an oil and gas accounting program?
1. An oil and gas accounting program is “absolutely necessary.” – Dan Kosikowski
2. “A well organized oil and gas accounting program will keep your records up to date and help make quick decisions on a variety of business transactions affecting your oil and gas operations.” – Tammy Wheeler
3. An oil and gas accounting program makes it easier to keep up with all your billing and expenses:
“To assist with AFEs and distribution of revenue” – Diane Osborn
“To handle doing royalties along with tracing each individual well’s costs” – Lori Maez
“To have better controls over revenue and JIBs and invoice verification” – Monte Lang
“To make sure all expenses and revenue are accurately accounted for. It is very easy to miscalculate distributions of expenses and revenue or over look billing out expenses.” – Renee Clark
“It makes the whole process of accounting and distribution easier and more accurate.” – Lorey Forrer
“A company should invest in an oil and gas accounting program because it not only makes JIB billing easier, it also allows faster input of production receipts and bills.” – Amy Montayne
4. An oil and gas accounting program “eases the stress and work of properly accounting for revenues and expenses on mineral producing properties.” – Anne Calvin
5. “Trying to manually account for oil and gas interests is very difficult when there are a significant number of wells involved. Even with a few operated wells, when there are a significant number of working interest or royalty interest owners, it also becomes difficult, especially when personnel resources are limited.” – Dan Neale
6. An oil and gas accounting program is “more accurate and faster than doing it by hand or spreadsheets, and it’s easier to check on past issues.” – Carol Watkins
“Excel spreadsheets are also too bothersome.” – James Phillips
7. “Oil and Gas management is a unique business you can’t explain to the general person. My first accountant screwed up so much the IRS felt sorry for me. … It’s nice to be able to find information and compare lease profits and do the book in a 10th of the time.” – Darwin Allen
8. An oil and gas accounting program is “cheaper than outsourcing and it allows you to track expenses and production, as well as AFEs. It integrates perfectly with QuickBooks, so from that perspective there is little or no extra training on the accounting side.” – Victoria Allen
9. An oil and gas accounting program allows you to “streamline and better handle the disbursement process, making allocations and disbursements SO MUCH easier.” – Bruce Brocker & Cynthia Moore
10. “Non oil and gas accounting packages are not designed to handle the unique processes of joint interest billing, revenue distribution, tracking LOE, suspense accounting, etc. While non oil and gas accounting packages could be used, extensive customization would most likely be required making support of your system much more difficult for the provider to provide. In addition, the processes might be much more time consuming and convoluted with a customized package.” – Teri Braun
11. “There are two main reasons: to streamline the distribution process and be in compliance with state tax reporting” – Kara Brooks
12. An oil and gas accounting program saves time.
“Saves time and money on accounting, and leaves more time for real job which should be generating drilling prospects.” – Rod Phares
“Definitely a time saving device. Don’t think you should be without such a program if you process JIBs or distribute revenue.” – Pat Johnson
An oil and gas accounting program “manages all the well information in one place and saves time.” – Diane Stallman
13. “To stay in tune with the changing accounting practices that affect the oil & gas industry” – Brenda Smith
14. “Oil & gas accounting is a complex “animal” and unique to the business. An accounting program will keep your business honest and organized so you can use what few tax breaks are left to us.” – Michael E. Flick
15. “Oil & Gas software is more regimented to the field.” – Diana Bennett
16. An oil and gas accounting program makes your business more accurate and efficient:
Invest in an oil and gas program for “speed, accuracy, efficiency.” – David Dorward
“It is an extremely efficient and effective way to maintain records for your company. It takes the hassle out of keeping records.” – TJ Hunter
“Efficiency and the ability to have information readily available to make decisions for your business.” – Tom Csapo
“To keep it all straight and accurate” – Peter Clute
“To make sure all revenue and expenses are distributed evenly to all” – Vicky Cross
“Because it is designed for the specific needs of the oil and gas industry and makes record keeping easier and more efficient.” – Rhonda Markum
17. An oil and gas accounting program allows you “to avoid dealing with the complexities of correctly calculating distributions for multi-owner programs; to keep accurate historical records.” – Louise Barton
18. “The benefits of owning an accounting program far outweigh the cost to purchase the program. You have so much more access to history, data and various other items.” – Cheryl Becker
As you can see, there are many reasons why it’s important to use an oil and gas accounting software program for your business. What’s your reason?