Managing thousands of mineral and royalty investments creates never ending oil and gas accounting complexity. Your mineral rights management team is inundated with monthly revenue statements from dozens, or hundreds, of different operating companies, each with unique reporting standards. Assuming you own mineral interests in 1,000 wells, operated by 40 different producers, with three to 10 lines of data for each well, you could be flooded with anywhere between 3,000 to 10,000 lines of data spread across hundreds of check stub pages for a given month.
Your team has an oil and gas accounting data management dilemma. Adding to the large-scale challenge of monthly revenue processing are prior period adjustments and the ever-present threat of bad data seeping into your general ledger through operator oversight or human error in your accounting department.
Enterprise mineral rights management demands more than partial solutions to revenue data delivery, quality control and analysis. Your team needs an enterprise-level approach that matches the scale and complexity of the assets you manage.
There is no silver bullet or push button solution to the problem; but the right mix of strategies and technologies will enable your team to accelerate and deliver 100% of revenue data directly to the general ledger and purpose-built mineral rights management software. Get started by implementing the following strategies for automating oil and gas accounting data processing so you can close the books faster than ever with the added confidence that your team always has validated, analysis-ready revenue data at their fingertips.
The mineral rights management paper problem
Ask your accounting team just how overwhelmed they feel processing the torrent of mineral revenue streams received monthly. Like most institutional investors, you receive a chaotic mix of physical and digital statements in widely varying formats. Check details hold vital revenue, pricing and expense information, yet your team likely waits weeks for oil and gas accounting data to be gathered and uploaded or manually keyed into accounting systems. This labor-intensive process delays mission critical reporting and workflows. Your accounting team is simply overwhelmed by the daunting scale of processing revenue, not to mention the added pressure from management to run up-to-date reporting.
Check data exchanges provide an ideal solution to the problem by converting paper statements into a common format and streamlining delivery of revenue data for operators that participate in the exchange. By subscribing to a check data exchange, your team will receive digital copies of revenue statements as well as structured data that can be loaded directly into your oil and gas accounting software.
To solve the mineral rights management paper problem, you also need a strategy to efficiently convert the paper revenue statements for your operating partners that do not participate in check data exchanges. This is where a third-party document conversion service can help. But loading and correcting errors through manual, in-house revenue processing is time consuming, injects risks and delays higher value tasks.
By outsourcing your monthly revenue processing, including scanning and data entry, your team can simplify and accelerate mineral rights management workflows. Professional oil and gas accounting data processing providers also leverage advanced technologies to ensure revenue statement accuracy through double-keying validation and other techniques.
Normalizing oil & gas accounting data
Participating in a check data exchange and outsourcing your revenue data processing to a professional third-party service is just the first step to completely automate oil and gas revenue delivery. Operator reporting preferences and formats vary widely. Lease and well names, for example, are often different from operator to operator. Normalizing information across oil and gas accounting data received each month is essential for you to make critical, timely investment decisions, yet may go unaddressed given the time required and limited bandwidth of your accounting department.
With millions of dollars lost each year to underpayments and incorrect deductions, oil and gas investors must have a strategy to ensure data integrity.
Effective mineral rights management should incorporate the right technologies that support master data management and help your team automate enforcement of data standards and normalization. Cloud-based mineral rights management software platforms can standardize and normalize your check stub data while also quality controlling critical asset information, such as interest decimals, commodity pricing and deductions.
Putting oil & gas accounting data in context to streamline mineral rights management
Whether you use WolfePak, OGSys, QuickBooks or another oil and gas accounting solution, your team needs a seamless way to work with revenue data along with the tools needed to get work done. In the ever-evolving digital oilfield, you need more than data sets. Your mineral rights management team also needs integrations that can deliver revenue data into the accounting and analysis software your organization uses.
By participating in a check data exchange, your team can also leverage an application programming interface (API) to automatically load oil and gas accounting data into your general ledger of choice. While this offers advantages in terms of making revenue data immediately available for financial reporting, specialized mineral rights management workflows — like NRI calculations and production verification — must be performed outside the GL.
Mineral managers need purpose-built oil and gas accounting that matches their unique non-op reporting and analysis challenges. Consider adopting a full stack mineral rights management platform that offers multidimensional benefits, including:
- A fully managed revenue data service that delivers 100% of digital revenue details for both check data exchange and out-of-network operators.
- Cloud-based mineral rights management tools that solve non-op accounting challenges, centralize, normalize and validate revenue data.
- An integrated data and mineral rights management platform that brings revenue together with category leading wells and production, activity analytics and courthouse data sets in context with accounting, land and GIS workflows.
In-house processing of non-op oil and gas revenue is time-consuming and error-prone, creating multiple risks and costs. Chances are your team spends a large amount of time each month on data processing, including hand-keying check stubs, manipulating operator files and troubleshooting data quality issues. The result? Information delays and incomplete or inaccurate financial data make it difficult to answer important questions about your portfolio.
A full stack mineral rights management approach that automates revenue delivery inside purpose-built cloud software will free you from the overwhelming monthly burden of processing statements in-house while ensuring the integrity of your oil and gas accounting data. Adopting such an approach also future proofs your mineral rights management business and ensures your team is always running on the latest enterprise-level technologies and data sets. By jettisoning in-house revenue processing, organizations can efficiently operate with a leaner team, enabling everyone to focus on high value workflows, evaluate more deals in a day, pinpoint underpayments and confidently acquire acreage ahead of the competition.
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