Customize your oil & gas accounting software for more functionality
In our 24+ years in business working with oil and gas operators and accountants, we know that each business is unique in how and what processes it needs to handle revenue distributions. These processes are sometimes complex enough that a whole new software program is used. It’s why we often suggest clients customize their oil & gas accounting software to get more functionality.
What falls outside of normal distribution processes?
Commons tasks often include: Delay Rental Payments, Authorization for Expenditure (AFE), Free House Gas, and State Reporting requirements. Most oil and gas accounting software programs will offer optional modules to make the standard software more functional.
This allows you to handle multiple tasks within one software program.
How operators sometimes handle this
Smaller companies will often manage with spreadsheets. While sometimes cheaper, these aren’t as professional and can be timely to use and update as your company grows. Mistakes are often made with spreadsheets and these can quickly become costly in terms of both money and public image.
The time spent managing your spreadsheets should also be considered. The labor will affect your bottom line and sometimes you just don’t have the extra time.
When mistakes, public image, labor, and peace of mind are all factored in, it quickly becomes obvious that the cost of an add-on module is a huge savings.
A simple add-on module allows for better historical records, a more professional look and any costs are typically recouped in only a few months.
Some of the optional modules SherWare offers clients include:
Land Management/Delay Rental Payments
Advanced Reporting (build your own reports)
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?
4 Things to Consider When Considering a Data Conversion
To Convert or Not Convert
When you purchase new software, should you do a data conversion or to start from scratch? You save time by converting your data, so here’s what you should know before going through with the conversion.
1. In what format is the current data stored or what format can it be exported to for conversion?
A conversion is easiest if the data from reports in the current software system can be exported to a Microsoft Excel or comma delimited format.
The data a software system uses can be stored in several different formats. Terminology used for the table and field names are most often cryptic and only make sense to the software developer. Having the data appear on a report with common column names such as “Well ID” makes it much easier to convert.
2. What data should be converted?
Choose what data you want to bring from your current oil & gas software system to the new software program. At a minimum, wells, owners division of interests should be converted since that is the heart of the system.
What about historical data?
The answer is: it depends.
What condition is your historical data in?
Is it clean? If not, do you want to go through it and clean it up before the conversion?
Do you want to include wells that have been sold or that are now inactive?
If you keep track of suspense (such as owner amounts on hold, owners under your check minimum and owners in deficit) convert these amounts so that your first distribution can take them into account.
The rest of the historical data can wait until later.
3. What data can be converted?
Find out what data can be converted to the new format and who needs to do the conversion. Most application vendors will do the conversion for you for an added fee, SherWare included.
The data in an accounting, revenue distribution and joint interest billing system is intricately woven together in such a way that the conversion needs to be handled with care so that all the related records are kept together.
Wells, owners (both royalty and working) and their addresses, settings and the division of interests can be converted.
The historical information can sometimes be converted depending on the format from which the data is being converted.
4. How long will the conversion take?
Having your data converted won’t do much good if it can’t be done in a reasonably quick fashion.
When you’re going through the conversion process, you won’t be able to use your existing system until the conversion is complete. If the data can be converted quickly, there will be no down time for your processing.
Most data conversions we do at SherWare take three days or less depending on the format of the information. Comma delimited and Excel files convert the quickest. Text files come in at a close second and other formats take longer.
What to do after a data conversion
After the data is converted, run comparable reports in the existing software and new software to make sure balances and division of interests match.
If you convert historical data, check the balances on well history and owner history reports, especially if you plan to create 1099s on the new system for the current year.
Converting to a new software system doesn’t need to be hard. If you take the steps to make sure your data is converted properly then you should be able to take off running with your new software system and never look back.
Speed Up Switching Oil & Gas Accounting Software
Switching oil & gas accounting software is hard. One of the reasons it’s hard is because of how it takes to transfer and train your office on a new system. It doesn’t have to be this way!
Here are 5 tips for helping to speed up the switch:
- Come up with an execution plan of what needs to be done when. It’s much easier to switch from your current oil & gas accounting software to a new system if you know the steps that need to be done. Having a deadline for each of the steps also helps move the project along more quickly. Part of this plan should also spell out who is responsible for each action item.
- Plan the switchover during an accounting down-time. You need your accounting system every day but there are times during the month that you can’t do with out it. Those times are when you need to process a revenue distribution or joint interest billing. Plan to execute the software switch at the slowest accounting time between processing cycles. This will make the switchover less stressful and help to make it run more smoothly.
- Determine the best cut off time for your current data to be converted to the new accounting system. The best time to do a conversion is when you don’t have many open items hanging around. This is most usually right after a distribution processing cycle before you’ve started entering data for the next cycle.
- Schedule training with your SherWare support team to help get your team the information they need when they need it. You need to learn the new oil & gas accounting system and you need to learn it quick. We’ve developed a training program that works for you and is included with your software purchase. The training is broken into “bite-sized” chunks that gets you the information you need and helps you to digest it. You’re working with your data during the training which helps to make the procedures “real”.
- Be confident that you’re getting the right information out of the new accounting system. The best way to do this is to run a parallel revenue distribution or joint interest billing. Ideally you’ll have a small run that you can do in both systems that will allow you to compare the numbers. Once you see that you’re getting the right results you can move forward confidently.
We at SherWare have helped hundreds of companies move from their current oil & gas accounting software to SherWare successfully. We can help you do the same.
Source: SherWare Blog
Invest in Oil & Gas Accounting Software that Scales With Your Growth
When looking for new oil & gas accounting software, select a program that will scale with your company. Here is a short list of characteristics that indicate a software program will scale with the growth of your company.
Adaptability
Flexible programs with many options and features allows you to handle many different situations. A rigid program limits data entry, processing, and corrections. These limitations will force you to change your process or handle special situations outside the program.
If the program offers optional modules, they allow you to add additional features needed as you grow.
Network Capability
Select software that can be installed on a server and workstations. You’ll also want a solid security process that allows multiple users with access to designated areas of the software is necessary.
Growing companies are often adding new employees, which results in a need for additional computers with access to the distribution.
Learning Curve
New employees need to be brought up to speed quickly to run the distributions. Select a software that offers a variety of platforms for training and support.
General video tutorials give an overview of the program.
Help Files and manuals allow a new user to dig into the depths of a particular feature.
Live web training provides one on one discussion with an expert guiding the trainee through the setup process.
On-Site training helps when a group is being trained, but it is often costly and not as effective as several live web training.
A knowledgeable support desk allows you to quickly resolve any questions or issues that come up.
Seek out a software that provides most of these tools for smooth transitions as new employees are added.
Customization
Unique deals in the oil and gas industry create challenges that no software program or process would have ever dreamt up. Some software companies are willing to create custom processes and reports for just your company.
A willingness to work with the user and create custom processes will assure you that you will be able to tackle any new challenges that appear.
An advanced reporting module gives you the ability to create your own reports is also a key feature for growing companies.
Find out if SherWare’s oil & gas accounting software is exactly what you need to grow your business.