Phil Sherwood

Author Archives: Phil Sherwood

Hidden Software Costs and How to Avoid Them

The initial price of the software is typically pretty clear. However, people are often surprised when they run into hidden software costs down the road. When picking a software program ask about any future costs that may be involved. Here are two charges that are the most irritating to run into after you purchase and how to not be surprised by them.

1. Software Updates/Upgrades

Many software companies sell the software wholly for a stand-alone price. The buyer will then need to re-purchase every few years or purchase any major upgrades that are released. These updates are necessary so that the software will continue to work with all other new technology that is released each year. But when not expected, these charges can be surprising and discouraging.

The best way to avoid this is to purchase a software program that offers yearly maintenance or support contract that includes all updates. These contracts are generally cheaper than re-purchasing the software every few years. This allows you to more easily see what the ongoing costs are going to be and budget accordingly.

Expired Support Contracts

The oil & gas industry is always changing and updates are regularly needed for newer operating systems, 1099s, regulation changes, and various other reasons. To save money, some clients will try to skip out of a year of support.

The intention is to save money this year, and then renew later if needed, or to simply skip out of paying support for a few years. This typically doesn’t work very well as most software companies require that you purchase past updates as well.

When a support contract is used for updates, then a fee is typically charged to be reinstated to support. The result is that the savings weren’t very much and typically not worth the hassle.

Software is typically only supported for a set number of years and if you skip out on support for the duration of that period, then you may find yourself in a spot where you have to re-purchase the software because support is no longer available for your version.

To avoid the costs associated with re-establishing a support contract it is best to simply maintain your relationship with the software provider by staying current on support. This is typically the cheapest way to maintain long term use of a software program.

What other hidden software costs have you run into?

5 Ways Using SherWare Helps During The Oil Slump

If you’re reading this, you’ve been affected by the oil & gas industry slump. There’s a glut of oil & gas in the world markets and the prices have plummeted. This affects everyone.

Especially so if you’re a small oil & gas producer or work for one.

We understand.

We’ve been in business for over 20 years and have catered exclusively to small oil & gas oilguys.jpgproducers. Hundreds of them depend on us for their oil & gas accounting software needs. We talk to them daily and understand their struggles during this downturn. 

When looking for oil & gas accounting software, you have a few choices. Here’s the top five reasons that SherWare is the best choice, especially now.

  1. We solve your accounting problems in the most cost effective way.

    In your search for software, you’re not looking for features, you’re looking for the solutions to the needs your company has. Using SherWare can solve those problems you face. We’ll be glad to tout our features, but we’d rather listen to you to learn what problems you need to solve and then help you solve them.

    If you compare the cost of software to solve your problems, you will definitely spend less using SherWare.

  2. There are less training costs associated with using SherWare.

    Starting with SherWare is very cost effective because we include in your software investment, the training you need to not only get set up, but also to start using the software to run your accounting.

  3. We have lower on-going costs.

    The costs of maintaining your SherWare software are lower than any other oil & gas accounting software out there. We offer a yearly support subscription that includes all updates and upgrades. We even offer an online chat support option to help you get instant answers.

  4. We give you options for handling your accounting.

    If you’re looking for a fully integrated oil & gas accounting system that includes everything you need, we have it. If you’re using QuickBooks™ and don’t want to replace it, we can help you there too. We have an application that handles your revenue distributions and joint interest billing that integrates with QuickBooks in real time. You only have to enter your data once.

  5. You don’t have to hire an accountant to run the software.

    Don’t get me wrong. We love accountants. But extra hiring in this industry climate is extra overhead you don’t need. Our software is the easiest to understand and use that you’ll find on the market. We take pride in how fast we can get you up and running and feeling confident.

We understand your predicament.

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Source: SherWare Blog

5 Tips For Making Sure Your Data Converted Successfully

checklist

Having your data converted from one oil & gas accounting system to another can be either a joy or a pull-out-your-hair experience. Once the data is converted you must do some checking to make sure that it converted correctly before operating the new software as your production system. Here are 5 things that must be checked to make sure the data converted correctly.

1. Check your division of interest listing to make sure that all wells total 100%.

Since the heart of a revenue distribution/joint interest billing system is the division of interests, you must make sure that the DOI converted correctly. The easiest way to check this is to look at the interest totals for each well to make sure they still add up to 100%.

2. Look at the owners and interests on hold.

Make sure that those owners and interests that were “on hold” in the old software are still marked as being held in the new software. You don’t want a surprise of several extra checks showing for owners that shouldn’t be receiving checks the first time you run a distribution in the new software.

3. Check owner suspense balances, if converted, to make sure they match what was showing on the old system.

If you had the suspense balances for the owners converted, make sure that the converted balances match the balances from the current system. Otherwise you’ll be paying out more or less than you should the first distribution or billing that is run.

4. Check year-to-date and inception-to-date totals by owner and by well and match to the existing system.

The owner totals are where the 1099 amounts come from so you must make sure that the amounts match the current system before continuing. Otherwise the 1099s at the end of the year will be incorrect.

5. Run a revenue distribution and/or joint interest billing on both the old software and the new and compare statements and checks.

Most people don’t think they have time to run a parallel revenue distribution or joint interest billing, but this is the best way to catch conversion mistakes. It is also the best way to gain peace of mind in the conversion process when you see the statements and checks matching. Sometimes you find the mistakes were with the old system in that it wasn’t handling something properly that was never caught. We’ve seen this repeatedly.

Data conversions are not for the faint of heart, but there are some things you can do to make sure that the conversion goes smoothly.

 


Source: SherWare Blog

Does anyone still use disks to install software? Should you?

Remember the days when you’d anxiously await the arrival of your new software installation CD so you could finally get started on your new software?

While some companies still rely on install disks for their software I see it eventually going away. Companies that still use install disks sell them in a retail environment, because, let’s face it: it’s silly to sell an empty box with a download link, although I’ve seen companies do it… *cough TurboTax*. This option is seen less frequently now since most software doesn’t require the disc to run it if you’re using up-to-date operating systems.

In the past few years, software giant Adobe has done away with discs and made everything available online for purchase and download through links alone.

With the rise of web based apps and downloadable content, issuing a install disk is outdated as soon as you put out an update. So it makes sense that we see more and more companies going to an install link vs. an install disk. It definately expedites the install process.

I would assume there are people out there that hold onto the data disc and like knowing where it is purely for the nostalgia. I have a stash of CDs from my childhood that I keep for no other reason than to look at them and relive the memories. (Other than that, they just collect dust). 

CDs were vital to software companies originally so the user could install the game or application on a new computer with the disc (and it didn’t get scratched). But this was also a time when internet speeds were creeping along and a download would take weeks not minutes.

Today with the Internet assisting in daily operations it would be more trouble than help to have a CD on hand. Here at SherWare, I’m at work around 8+ hours a day on the computer. Since getting my MacBook Pro over a year ago, I’ve installed probably 10-20 different programs that I use. In the last year I can count how many times I’ve touched an install disk: 0. My computer doesn’t even have a CD drive. If your updates come from the Internet anyways, why can’t your install files?

The simple answer: It can, and should.


Source: SherWare Blog

Spreadsheets Just Can’t Cut It

 

Spreadsheets have long been the go-to tool for oil and gas companies looking to track expenses and revenue because essentially everyone knows how to work a spreadsheet.

spreadsheetBut, if you’ve been using spreadsheets to track your distribution processes, you’ll have experienced at some point an error in a formula or the wrong cells copied over to the wrong column…. the possibiltiies are endless in the tiny, yet time-consuming-to-find mistakes that have been made.

Spend Less Time Fiddling with Spreadsheets

There’s a reason why spreadsheets are so popular across the business world. They’re no-frills and adaptable, so they’re a “good enough” solution for most businesses.

However, their strength is also their biggest weakness: they’re not specifically designed for any one industry.

That’s where oil and gas accounting software enters the scene to help with distributions and joint interest billing. If you’ve never considered it before, dedicated oil and gas software automates processes in a way that spreadsheets can’t match, saving you enormous amounts of time. In fact, once you get your software set up, you can track and list expenses, revenue, and distribution at the click of a button.

Or you could spend hours manually entering all of the information every month and praying the calculations were the same from the last time you opened the spreadsheet.

Keep Your Costs Low by Eliminating Mistakes

In big business, mistakes cost money. In the oil and gas industry, operator mistakes can lead to incorrectly reporting expenses and revenues, erroneously distributing incomes, or simply increasing accounting times.

All of these mistakes can be expensive. With a dedicated accounting software – unlike a spreadsheet – you can streamline the process and have in-system auditing. This ensures you don’t make mistakes, and also makes sure you keep your data safe and backed-up.

Spreadsheets, on the other hand, know nothing about your business. All they know is their own complicated formulas – so if you screw up, they won’t catch it…and neither will you, until it’s already cost you money.

Pick the Right Tool for the Job

Accounting for the oil and gas industry is a specialized beast. It takes specific tools and know-how, and it’s just not feasible for a generic spreadsheet program to give you all of the bells and whistles you need.

To read more about spreadsheet risk and some tips for using spreadsheets if you’re currently using them, check out our free Ebook: Spreadsheet Risk.

 

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Source: SherWare Blog

4 Tips To Using Oil & Gas Accounting Software To Increase Quality

focusonqualityWhen it comes to using a software program for your Oil & Gas accounting, there are several things you should keep in mind to focus your business processes and create a quality financial management system. The following 4 tips help you integrate your software, plan your business systems, and build quality throughout your company:

  1. Automate Financial Reporting – One of the largest parts of oil and gas industry regulatory and tax compliance is regular and accurate financial reporting. Integrate your financial systems so that required monthly, quarterly and yearly reports are generated and filed automatically; this increases quality through reducing the time your accounting team has to spend on menial data-entry tasks and through maintaining communication with interested parties. 
  2. Obtain Real-Time Information – Use modern accounting software to generate immediate real-time, accurate reports. Management and employees can use this for building a system of communication based upon facts; having financial facts is fundamental for any quality management system, and the right software will give you the financial facts regarding your business all the time. 
  3. Reduce Reconciliation – One of the greatest causes of errors between accounting and management is the need for reconciling different accounts, statements and dedicated business funds. With the right integration, reconciliation becomes a matter of automatic updating, not manual data entry. This enables you to set up sinking funds for capital, emergency funds and automatic bill pay/disbursements without feeling like you might be missing some crucial information. 
  4. Stop Manual Data Entry from Business Systems – Much of your business systems, whether it is operating wells or investing in oil & gas, is manually entered into multiple systems by multiple people, causing room for errors, confusion and delay. The right accounting software will pull data from your wells, creating real-time, automatic updates of costs, revenue and profits owed without any manual data entry. 

Although these 4 tips seem like varieties on a theme, automate everything, they are unique parts of your business which often get overlooked when integrating a new accounting software system. And each of these areas (governmental reporting, quality control information, financial planning and site-to business automation) has a drastic effect upon your ability to create quality business systems for your company. 

We have software that can help tie all your systems together into a cohesive unit which will help to increase the quality of your business processes.

 

Take a tour

 


Source: SherWare Blog

New Oil & Gas Accounting Software Site

 

The day has arrived! We’re excited about the new look and think that it will greatly enhance our ability to provide value to our prospective and current clients.

The redesign has been over a year in the making. It’s been a fun process and has stretched us in some ways which I believe are for the better.

We believe we have great oil & gas accounting software and think we should do better about letting the world know about it. 

AM_IconThe Oil & Gas Accounting Manager is our fully integrated, (which means that it has everything in one application), accounting software for oil & gas operators. It includes revenue distribution and joint-interest-billing integrated with all the regular accounting modules like G/L, A/P, A/R and Financial Reporting.

 

The Disbursement & JIB Manager Integrated Edition is our top selling Quickbooks® integrated revenue dmie-small-icondistribution and joint-interest-billing software. Is uses QuickBooks for the accounting module and posts transactions in real time so that you don’t have to enter data twice. We’re the only oil & gas accounting software company that offers this real time integration.

 

dm-small-iconWe also have the Disbursement and JIB Manager which is a basic revenue distribution and joint-interest billing application. It has everything needed to create royalty and working interest owner checks as well as billing for expenses. You would use this application if you already have an accounting application in place which doesn’t handle revenue distribution or joint-interest-billing, and you don’t want to switch.

 

The newest edition to our applications is Well Profits which handles tracking revenue and expenses for oil wp-icon& gas royalty owners and investors. It will also integrate with QuickBooks if you want to keep track of the accounting in QuickBooks but need better reporting at the well/lease level.

 

We’ve been busy and we’re really excited about this next year! Please check out the site upgrade and let us know what you think.


Source: SherWare Blog

Well Profits software tracks investments for royalty owners, investors

If you are an investor in oil and gas wells or a royalty owner that receives 8/8ths payments from operators – then you likely need a way to track all those investments and see how well your money is performing.

wellprofit_logoOur newest product, Well Profits, does exactly that. It’s an easy-to-use software product that allows you to track your investments and make real-time decisions based on profit and loss.

wellprofit_logoThroughout the rest of this month, I’ll be sharing a little bit more about how Well Profits works through a brief video demonstration, a podcast interview with the developer on how it was created and maybe even a little statistics from our investors.

First though – let’s see how simple we’ve made tracking your investments.

We’ve outlined it in three steps.

Step 1: Enter receipts

When you receive a check for production from an operator for the interests you have wells in, you’ll enter them into our software line by line, to give you the most detail to track and report on.

Step 2: Enter bills

When you receive an invoice for the expenses the wells you have an interest in have incurred, you’ll enter all the detail that you have on the invoice directly into the software.

Each line of expense will be entered individually, keeping a running total at the bottom of the screen until the entire bill has been added. Using expense codes and expense descriptions you’ll have already created when setting up the software, as well as vendor terms and due dates, entering your data just became a breeze.

Step 3: View Reports

Once all your data you’ve been sent for each well has been entered, you can create robust reports and graphs to see how well they’ve performed. With more than 20 pre-created reports already built into the system and the ability to design your own reports – the sky is the limit on what kind of reports you can run.

Visit our website at wellprofits.sherware.com to see more information on how the software works.

You can request a demo of the software, watch a brief introductory video or download an info packet.


Source: SherWare Blog

Texans given updated rules for well construction after Rule 13 amended

As a shout-out to all of our oil and gas friends and clients in Texas, I’m posting this public service announcement reminding everyone that new amendments to Statewide Rule 13 regarding well construction requirements are now in effect as of January 1.

The Texas Railroad Commission, who oversees the activities of the oil and gas industry, as well as other industries, passed the amendments last May in an effort to update and give clarity to operators regarding oil and gas well construction requirements related to casing, drilling, cementing, etc.

RRC-logo

According to the Railroad Commission’s press release, “Texas is blessed with an abundance of natural resources, including several prolific shale plays that will continue to fuel an unprecedented growth of exploration and production. It is vital that as the state’s top energy regulator, we update and enhance our rules to continue our agency’s proud legacy of environmental protection and public safety,” said Commissioner David Porter.

A few of the amendments include:

– For wells undergoing hydraulic fracturing treatments, operators are required to pressure test well casings to the maximum pressure expected during the fracture treatment and notify the Commission of a failed test.
– Operators are required to isolate (place cement behind casing) across and above all formations that have a permit for an injection or disposal well within one-quarter mile of a proposed well.
– Operators are required to use air, fresh water or fresh water-based drilling mud until surface casing is set and cemented in a well to protect usable quality groundwater.

To read all of the amendments now in effect see the Texas Railroad Commission website.

For those whom these amendments will affect, what’s the impact? How much was changed and how it will affect your business for good or bad?


Source: SherWare Blog

Industry faces more governmental red tape to drill on public lands

Not surprisingly, the oil and gas industry and Obama’s Administration find themselves at odds regarding offshore leases and opening up more public lands for drilling. A common complaint since the Deepwater Horizon disaster in April 2010 has been that the Interior Department has been purposefully either blocking domestic oil and gas production through lease rejections or through approving them so slowly to make them not worth pursuing.

Recently the Obama Administration came out with a new claim to deflect the industry’s complaints elsewhere by claiming that U.S. oil and gas producers are sitting on millions of acres of idle government land leases.

Secretary of the Interior Ken Salazar says that if producers really are sincere about wanting to increase energy production domestically, that they would activate millions of acres of public land already lease to them. A report released by the Department of the Interior claims that of the 36 million acres leased offshore for oil and gas production, 72 percent sit idle.

The industry claims the accusations are “absurd and willfully misleading.”

Jack Gerard, American Petroleum Institute CEO says just because a lease doesn’t fit the government’s definition of active doesn’t mean it’s idle. With only 30 to 40 percent success rate in finding oil, many factors could affect why a lease is idle:

– With a low success rate, a producer has to narrow down its leases to find the lease good enough to drill on

– The lease may be currently uneconomic to extract – take the Bakken fields for example – up until 5 years ago most of those leases now producing millions of barrels of oil a day were sitting idle because the technology was invented yet to blast through those fields.

– Governmental red tape and delays could take up 19 years from the time it takes to prospect, drill and wait for government approvals – during which part of that wait the government considers the lease to be idle, says Kathleen Sgamma, vice president of government and public affairs for the Western Energy Alliance. Sgamma also contends the government can move energy projects like the offshore and domestic leases through more aggressively if it wanted to because that is exactly what it has done with wind and solar projects.

“It’s only politics that accounts for the different treatment accorded oil and gas,” Sgmama said.

Erik Milito, API director of upstream and industry operations claims the government is fallacy: ‘We don’t have to open up any more public land to you, because you’re not using the leases you’ve already got’–is the belief “that you just put a pipe in the ground, and you’re ready to go–that there’s always oil there.”

The Interior’s reaction to API’s explanation: “The report speaks for itself. The notion that we have somehow locked up federal lands clearly doesn’t square with the facts. Our goal is to continue expanding safe and responsible development and we will continue to take steps to deliver on that priority.”

You can check out the government’s full report on the idle leases here.

What has your experience been with drilling on public lands? What red tape have you run into?


Source: SherWare Blog